House of Representatives
16 August 1961

23rd Parliament · 3rd Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1961

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

page 101

EMPLOYMENT

Petition

Mr. BEATON presented a petition from certain citizens of the city of Bendigo and district praying that, in order to maintain the level of employment both at Bendigo and at other naval construction centres, orders for vessels lodged overseas be cancelled and placed with shipyards within Australia.

Petition received and read.

page 101

QUESTION

WOOL

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I would like to ask the Minister for Trade whether it is a fact that there was no Australian wool exhibit at the trade fair in Sydney. If this is a fact, in view of the hundreds of thousands of pounds that have been spent by other countries in promoting the sales of their products at that fair, will the Minister give a satisfactory explanation of Australia’s failure to exploit this golden opportunity to display the excellent products which the wool industry can offer to the world?

Mr McEWEN:
Minister for Trade · MURRAY, VICTORIA · CP

– I have seen something in the press about this and I have seen a comment by the chairman of the Australian Wool Bureau, Sir William Gunn. The promotion of wool, by consent of this Parliament, is within the control of the wool industry itself through its own body, the Australian Wool Bureau on which there are six elected representatives of the wool industry and one person nominated by the Government. The wool industry would not relish the Government or the Opposition deciding when it was best that it should publicize its goods.

page 101

QUESTION

LOCAL GOVERNMENT FINANCE

Mr WHEELER:
MITCHELL, NEW SOUTH WALES

– I preface a question to the Treasurer by stating that several local government bodies in my electorate have expressed disappointment at the amount of loan money recently made available to them through the agency of the New South Wales Government. Will the right honorable gentleman say what procedure is observed by the Commonwealth Government in matters of this nature? Has the Commonwealth Government any jurisdiction over the allocation to local councils of money approved to be raised by the Australian Loan Council? Finally, has the Commonwealth Government, in fact, any assurance that money so raised by a State government for local government activities is actually spent in that direction?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– There is a quite consistent and formal practice in these matters. In the course of the annual Australian Loan Council meetings, the loan works programme is determined and, after that, there is a discussion under what is called a gentlemen’s agreement on the total amount which will be authorized for loan raising by semi and local government bodies.

Some overall supervision of the total is necessary because if it were unlimited there could be some reduction in the funds otherwise coming into government loan raisings on behalf of the States. Since, over recent years, the Commonwealth has had to bridge a quite sizeable gap between the total of loan raisings and the total of the agreed upon programme, we, together with the State Premiers, have an interest in seeing that the total allocated by way of authorization for local government borrowings is of a dimension which seems reasonable to us. That does not mean that there has been no increase over recent years. On the contrary, during the period of office of this Government, the authorizations have more than doubled in total. This year’s total of £112,000,000 can be increased by an additional £5,000,000 if the proposal which I have just circulated to the State Premiers is acceptable to them.

In case there is any misunderstanding of the matter, I should like to make it clear that the £5,000,000 to which I made reference last night is additional to the £5,000,000 increase over last year’s programme which was agreed upon at the last meeting of the Loan Council. We, as the Commonwealth Government, have no jurisdiction over the allocations made inside the States once the Loan Council - which consists, of course, of the Commonwealth and the six State governments - has decided on the pro rata distribution of the authorized loan raisings. From then on, it is a matter for each State government itself to determine how authorizations to raise funds should be allocated amongst the various local government and semi-government bodies inside the State. That is a right which the States very properly reserve for themselves and one which is entirely within their province.

As to whether the States apply the total authorized loan raisings in this way is a matter on which I cannot claim to have precise information. My understanding is that, as responsible governments in their own spheres, the State governments do see to it that what is authorized for raising by local government bodies is raised in total by them.

page 102

QUESTION

UNEMPLOYMENT BENEFIT

Mr COURTNAY:
DAREBIN, VICTORIA

– I ask the Treasurer whether he can enlighten us as to the actual cost to the nation each week of unemployment benefit payments.

Mr HAROLD HOLT:
LP

– I shall get the information for the honorable member. I do not know the period over which he wishes me to trace it.

Mr Courtnay:

– -Taje it for this week.

Mr HAROLD HOLT:

– We will not know what this week’s allocation is until the figures come in from the Department of Labour and National Service. This question should more appropriately be addressed to my colleague, the Minister for Labour and National Service who, I think, would be in a position to give weekly figures. I understand that the figures come forward to him from the Department of Social Services virtually week by week.

page 102

QUESTION

EMPLOYMENT

Mr KILLEN:
MORETON, QUEENSLAND

– I direct a question to the Minister for Labour and National Service. In view of the recent unfortunate allegation made by the Leader of the Opposition to the effect that the employment figures compiled by the Department of Labour and National Service were faked, will the Minister, with the object of assisting the Leader of the Opposition and those who share his miserable cynicism, state how the figures are compiled, who compiles them and by what method they are released?

Mr MCMAHON:
Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– 1, too, think it is regrettable, Sir, that the Leader of the Opposition should have used the phrase that the figures were faked. I believe the procedures followed prevent anything other than the accurate figures being presented to the people and, in fact, to this House. It is an automatic process. The figures are collected from 141 employment offices and from about 400 agencies. They are sent to the district regional offices in each State and then to the central office where they are collated and released. So they are not touched by the Minister; they are compiled only by Commonwealth public servants. No opportunity is wanted, nor is there any opportunity, to alter the figures in any way.

As to the actual date of release, Sir, in order to make it completely automatic and prevent any real argument developing on this matter, I have made one alteration to the established procedure and it is this: The figures are to be compiled on the Friday closest to the end of each month, except in cases where that Friday is more than two days after the commencement of the succeeding month, in which case the figures are to be compiled on the Friday before. The figures are released seventeen days later after we have collated them and assessed their value. So both processes are completely automatic. The Minister has nothing whatever to do with the compilation of the figures, or the actual date on which they are released.

page 102

QUESTION

EDUCATION

Mr REYNOLDS:
BARTON, NEW SOUTH WALES

– I direct a question to the Prime Minister. In view of the submissions on education made on behalf of all Premiers at the last Premiers’ Conference, and in view of the nation-wide petition presented to the Parliament at the end of the last sessional period, I ask the Prime Minister to say what action the Commonwealth Government is taking to meet this widespread request for a specific emergency grant to deal with the crisis in primary, secondary and technical education and teacher training. Secondly, when does the Government propose to institute a national inquiry into the needs of education? Finally, will the inquiry cover all the levels of education as requested by all the State

Premiers, by all the parent-teacher organizations and by the 241,000 petitioners to this Parliament?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– The representations that have been made are under consideration. Meanwhile, I just want to remind the honorable member that this Government has a record in the field of education never approached previously in the history of Australia.

page 103

QUESTION

EUROPEAN COMMON MARKET

Mr KING:
WIMMERA, VICTORIA

– My question is directed to the Minister for Trade. In view of the great interest and the concern that has been displayed throughout Australia in the possible entry of the United Kingdom into the European Common Market, will the Minister make available to honorable members figures showing the value of the various commodities sold to the United Kingdom and to the present members of the Common Market group?

Mr McEWEN:
CP

– I shall be very glad to arrange for the compilation of the figures showing the value of the commodities sold to the United Kingdom and to the present members of the European Common Market area, and to make them available to any honorable member who desires to have them.

page 103

QUESTION

MEANS TEST

Mr SEXTON:
ADELAIDE, SOUTH AUSTRALIA

– I direct a question to the Minister for Social Services. Will the Government adjust the property means test permissible limits in a similar manner to the adjustment already indicated for the income tax age allowance?

Mr ROBERTON:
Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– If I understand the honorable member correctly, the answer to his question is that, with the increase in the rate of age, invalid and widow’s pensions of 5s. a week announced by the Treasurer last night, the limit of property, where there is no other income, for a single pensioner beyond which no pension is payable will rise from £4,620 to £4,750 and for a married couple from £9,240 to £9,500.

page 103

QUESTION

RATHMINES AIR BASE

Mr DEAN:
ROBERTSON, NEW SOUTH WALES

– I desire to ask the Minister for the Interior a question concerning the former Royal Australian Air Force base at Rathmines, New South Wales. Has this base been handed to him for disposal? Has he received any representations from the New South Wales Government or the Shire of Lake Macquarie concerning any use to which they wish to put the property?

Mr FREETH:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– The Department of Air declared the Rathmines base surplus only last week and it has come into the hands of the Department of the Interior for disposal. As is usual with such matters, we first approached the New South Wales Government to ascertain whether it had a requirement for the property. The New South Wales Government has expressed some interest in it and has sent an officer to inspect it. At present we are waiting to hear whether the State has any requirement for the property.

page 103

QUESTION

GOVERNMENT LOANS AND FINANCE

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Treasurer a question to elucidate his statement in the Budget speech that the Government has encouraged the States to accelerate works expenditure in the first half of this financial year. Does the right honorable gentleman mean that the States will now receive larger loans for their works programmes over this financial year than were promised at the meeting of the Australian Loan Council in June or that they will still receive the same total amounts? In other words, is it intended that in each of the first six months of the year they will receive more than one-twelfth of the amount agreed upon in June and in each of the second six months will receive correspondingly less than onetwelfth of the amount? I also ask whether the Commonwealth itself aims to spend a greater amount in each of the first six months than in each of the second six months or whether it aims to spend as closely as possible the same amount each month throughout the year.

Mr HAROLD HOLT:
LP

– The view taken by the Government of the economic situation has been that in the first half of the financial year there will be less activity by private enterprise than in the second half of the financial year. We see the process as one of a steady recovery through the latter part of this calendar year, with a resumption of more buoyant levels of activity in the private enterprise sector in the second half of the financial year. That being so, particularly in view of the available resources of labour and materials, we thought there was merit in the proposal that the State governments and the Commonwealth Government should so adjust their works programmes as to have a rather higher degree of activity in the first half of the financial year than in the second half. It was not to be inferred from this that there would necessarily be any increase in the overall programme agreed upon, although it has been customary over recent years for the works programme and the undertaking given by the Commonwealth to assist to be looked at in the early part of the next calendar year. We wanted the States to be assured that, if they were prepared to co-operate by speeding up their works activities in this way, they would not be. embarrassed financially because of the practice that had obtained in the past of the Commonwealth making available to them in each month one-twelfth of the total amount agreed upon for the year. We wanted the States to realize that if, as a result of their co-operation, they needed at a particular time a greater proportion of the allocation than they might have expected under the old practice, we would see that they got it. We will, of course, be reviewing the overall economic situation as the year progresses. We certainly hope that we shall be able to confine the works programmes within the figures already agreed upon, and our Budget has been based on that expectation. However, as I say, it is customary to have another look at these things early in the new year. I am quite certain that it would be very useful, and would result in an increase of employment opportunities, if all the States and the Commonwealth endeavoured to speed up their works programmes in the first half of the financial year.

page 104

QUESTION

TAXATION

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– My question is also directed to the Treasurer. Can the right honorable gentleman tell the House what stage has been reached in the consideration of the report of the committee on taxation, which was presented to him on 26th June? Will the document be tabled in the House at an early date?

Mr HAROLD HOLT:
LP

– I can tell the honorable member, and the House, that we have received the report, and that it has already been given some consideration, although by no means final consideration, by the Cabinet. For the information of the House, and of the public generally, I shall be tabling the report to-morrow morning. Copies will then be available, and honorable members will later have an opportunity, if they wish to avail themselves of it, to discuss the matters involved during the course of the Budget and Estimates debates.

page 104

QUESTION

UNEMPLOYMENT

Mr KEARNEY:
CUNNINGHAM, NEW SOUTH WALES

– My question, which is addressed to the Treasurer, bears upon the rate of Commonwealth Government expenditure. Is it a fact that official reports disclose that the. number of registered unemployed has increased to the unnecessarily high figure of 113,000? Is it a fact also that the ugly situation has developed to the point at which no fewer than 61,499 persons are dependent upon inadequate unemployment benefits to enable them to eat? If these are facts, do they not reflect an intolerable social condition? Will the Treasurer say what action has been or will be taken to permit various Commonwealth departments to increase sharply their rate of expenditure on public works, so as to provide employment? If no such action has been taken, may we infer that the Government intends that the burden shall be carried mainly by the various State governments and, to a lesser extent, by local government authorities?

Mr HAROLD HOLT:
LP

– I thought I made it clear last night that this Government has no wish to see an increase of unemployment. Indeed, I do not think any member of this House feels happy about a situation in which people are looking for work opportunities and cannot find them. When the honorable member talks about intolerable conditions resulting from the present level of unemployment, I find his remarks most interesting, in view of the attitude disclosed by a Labour government just after the end of World War II., at some time in 1945. At that time we were contemplating the kind of situation we might have to contend with in a time of peace, and it was put forward quite realistically, as matters were -viewed at that time, by a senior member of the present Opposition that we might regard 5 per cent, of unemployment in the work force as virtually full employment, having regard to past experience. I am sure that we are all delighted that since the end of the war Australia has been able to maintain a very much more satisfactory level of employment than was envisaged by that honorable member, and that even a level of 2i per cent, of unemployment, which is approximately the current level, and which is relatively low by the standards of most other industrialized countries, is still regarded in Australia, by all sections of the Parliament, as a matter for concern, calling for special action.

Last evening, I dealt, broadly, with the action that we were anxious to take. I mentioned a few moments ago, in reply to a question asked by the Deputy Leader of the Opposition, that we were encouraging the States, and taking action ourselves, to speed up the programme of works in the first half of the current financial year. I pointed out that we had made arrangements for increased lending by the Commonwealth Savings Bank of Australia for housing purposes and that we had communicated with State governments offering to join with them in extending the programme of local government works by another £5,000,000. I pointed to the increased expenditure in a variety of directions which would provide work opportunities under the Commonwealth programme. All these things, taken together, will give a valuable stimulus to employment and they should also, in the context of the general budgetary programme, give a valuable stimulus to the private section of industry, which still provides three out of every four jobs in this country.

page 105

QUESTION

FIBROMA ANTI-MYXOMATOSIS VIRUS

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– I wish to ask the Minister for Health a question without notice. Is he aware that Dr. Shope, who developed the Fibroma anti-myxomatosis virus, has recently expressed the opinion that this virus may be transmitted by means other than direct inoculation? If this is so, in view of the tremendous cost to the economy which could occur if rabbits were made immune to myxomatosis, will the Minister approach the New South Wales

Minister for Health with the object of having the use of this anti-myxomatosis virus banned until more is known about the ways in which it can be transmitted?

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– The position is that the Fibroma virus, which is allied to that of myxomatosis and is used to immunize animals against myxomatosis, just as vaccinia virus is used to immunize humans against small-pox, has been in use in scientific laboratories in Australia for quite a number of years. When the rabbit-breeding industry was begun in New South Wales* some virus was made available to the proprietors of rabbit farms so that they could immunize their animals against myxomatosis. Subsequently the New South Wales Government - I offer no criticism of it for doing this - allowed the commercial manufacture of Fibroma virus in New South Wales and rabbit breeders were able to obtain it from a commercial source. For many years until just recently, the firmlyheld opinion of our scientific advisers has been that the Fibroma virus was not transmitted by means other than direct inoculation. The matter has been under review again recently in view of the opinions expressed by Dr. Shope, and most of our scientific advisers are still of the opinion that there is virtually no danger of this infection spreading to the wild rabbit population. However, the matter is being looked at again. What action can be taken I am unable, of course, to tell the honorable gentleman. Whether the manufacture of the virus can be continued is really a matter for the New South Wales Government.

page 105

QUESTION

POLIOMYELITIS

Mr BIRD:
BATMAN, VICTORIA

– I wish to direct a question to the Minister for Health, ls it a fact that, because of the shortage of Salk vaccine in Australia, the number of cases of poliomyelitis in the first seven months ot this calendar year was greater than the number for the entire twelve months of 1960? After an eight months’ delay in the supply of the vaccine, when can the State health departments expect to receive further supplies of this life-saving essential?

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– I cannot give the honorable gentleman the precise number of cases of poliomyelitis in Australia this year, but it is not large. However, he will be interested to know that about 160,000 doses of Australian-made Salk vaccine are expected to be ready for distribution by the end of this month. He probably knows that we have released recently a considerable quantity of Canadian Salk vaccine. In addition we expect, and have strong hopes of success, to be able to liberate in the near future another 600,000 doses of Australian-made Salk vaccine. Whatever difficulties have existed in the manufacture and distribution of Salk vaccine - they have been quite considerable - we feel confident will be overcome completely in the very near future.

page 106

QUESTION

EUROPEAN COMMON MARKET

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– I address my question to the Prime Minister. Now that the United Kingdom has made official application to join the European Common Market will Australia be allowed to have an observer at the dicussions which will take place to decide the conditions of the United Kingdom’s membership? I ask this question because the conditions of membership could affect Australia’s primary industries to such a marked degree.

Mr MENZIES:
LP

– This and other procedural matters will be dealt with in the statement that I propose to make after dinner to-night.

page 106

QUESTION

SALES TAX

Mr FULTON:
LEICHHARDT, QUEENSLAND

– My question to the Treasurer relates to the sales tax concession that he announced last night in his Budget speech to stimulate fleet replacement. Does the concession apply only to completely new vehicles including body, motor and chassis, or does it apply also to the provision of new bodies for road-worthy vehicles? If it does not apply to the latter, will he consider extending the tax concession to the replacement of bodies of roadworthy vehicles and so give the small operator a chance to compete against his wealthier opponents? This also would give a stimulus to employment.

Mr HAROLD HOLT:
LP

– I am not clear whether the honorable gentleman is referring to passenger bus operators or to road trains.

Mr Fulton:

– I am referring to passenger bus operators.

Mr HAROLD HOLT:

– We have provided that the chassis and the body can be taxed separately. I shall see that consideration is given to the question and if the point raised by the honorable gentleman is not covered I shall ascertain whether it can be covered.

page 106

QUESTION

WATERFRONT EMPLOYMENT

Mr HOWSON:
FAWKNER, VICTORIA

– Can the Minister for Labour and National Service inform the House whether the Stevedoring Industry Act which was passed by Parliament in the last sessional period is now achieving its purpose? Has there been any improvement in performance on the waterfront? How many men have taken their long service leave?

Mr McMAHON:
LP

– I think it is correct to say that the act is working very well indeed. About 400 of the 500 regular waterside workers over the age of 70 years have applied for and have received their long service leave payments. Many other applications are now being processed. All told, I think about 920 men have received their payments and the Australian Stevedoring Industry Authority has paid out something of the order of £230,000. As to what is happening with regard to discipline on the waterfront, it is well worth mentioning that in June the loss was about 9,600 hours and the figure last month was about 7,000 hours. These figures compare most favorably with the average monthly loss over the past few years of 65,000 hours. There has been a very considerable reduction.

Yes, I do think that the act is working well and much better than any of its critics ever could have thought that it would. This matter is of such importance that I shall prepare a statement for the honorable gentleman and shall make a public release of it.

page 106

QUESTION

DEPARTMENT OF HEALTH BOOKLET

Mr COPE:
WATSON, NEW SOUTH WALES

– In directing a question to the Minister for Primary Industry I remind him that recently a booklet entitled “ Eat Better for Less “, issued by the Department of Health, and sponsored by the Government, stated that bacon was a luxury food. 1 ask the honorable gentleman: Does he agree that bacon is a luxury food?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– This matter has been dealt with repeatedly in the House by my colleague, the Minister for Health, and I think the honorable member must have been asleep when the Minister was speaking about it. I think that bacon is not a luxury food, but we have had a luxury price put on it recently by some of the processors.

Mr Cope:

– Why did the booklet issued by the Government say that it was a luxury food?

Mr SPEAKER:

– Order!

page 107

QUESTION

HEART DISEASE

Mr CLAY:
ST GEORGE, NEW SOUTH WALES

– Does the Minister for Health recall that during the recent National Heart Campaign we put forth propaganda that 53 per cent, of the people would die sooner or later from heart disease, which would mean that 53 per cent, of the people in this chamber would eventually die from heart disease? Is the Minister aware that many medical practitioners have strongly advised their heart patients to cease using butter and to substitute vegetable margarine for it? If the Minister is aware of this fact, and agrees with the wisdom of this advice, will he seek ways and means whereby sufferers from heart disease, may readily obtain vegetable margarine, as distinct from most margarines which are made from an animal fat, namely whale oil, because in nearly every shop vegetable margarine has become an underthecounter commodity?

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– I am sure that if the honorable gentleman really directs his attention to this matter he will realize that each individual medical practitioner offers to his patient the advice he considers best in his particular case.

page 107

QUESTION

LOCAL GOVERNMENT FINANCE

Mr WIGHT:
LILLEY, QUEENSLAND

– My question to the Treasurer is supplementary to that asked by the honorable member for Mitchell, and relates to the grant of an additional £5,000,000 to local authorities, which was referred to by the Treasurer in the Budget speech last night. The Treasurer will recall that recently some local authorities raised the argument that there should be a direct allocation of funds from the Commonwealth to local authorities, and that the reply given was that the State governments themselves fixed the limit of loan-raising and the allocations to local authorities. Will the Treasurer clarify for me the machinery methods by which this additional £5,000,000 which the Commonwealth is to make available to local authorities will be distributed? Have the States been bypassed in this matter, or have they been consulted on it?

Mr HAROLD HOLT:
LP

– I can assure the honorable member most emphatically that the States have not been by-passed in this matter. I have written to all the Premiers, and the document should have been in their hands before I made my public reference to the matter last night. I sought their comments on this proposal, and I hope to have their concurrence with it. If agreement were given by the States the additional money would almost certainly be distributed in the same proportions that applied to the total amount previously agreed upon for authorization to the various local government bodies and, as in that case, it would be for the State governments themselves to decide just how this £5,000,000, or that proportion of it which was to be made available in their respective States, was to be distributed to the various applicants.

page 107

QUESTION

UNEMPLOYMENT

Mr CALWELL:
MELBOURNE, VICTORIA

– I desire to ask the Attorney-General a question without notice. I ask the honorable gentleman: What did he mean when he said in a television interview in Queensland on 30th July “that unemployment resulting from the credit squeeze was greater than the Federal Government would have wished or could truly have expected “? In particular, I ask him how much unemployment did the Government wish to create, and to what extent did the Government’s plans get out of hand. I also ask: When does the Government expect to be able to get. control of the situation again now that the position is out of hand?

Sir GARFIELD BARWICK:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

– I am delighted to know that what I said was remarked upon by the Leader of the Opposition, but his question does not concern the administration of my portfolio.

page 108

QUESTION

NEW STATES

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– My question is directed to the Prime Minister. Is it a fact that recently a deputation from the New England New State Movement waited upon him with a view to obtaining from him an assurance that the relevant sections of the report of the Constitutional Review Committee might be discussed during the term of the present Parliament? Is it also a fact that he indicated that he would refer the matter to Cabinet with a view to ascertaining whether time could be made available? Has 3ie yet been able to arrive at a conclusion upon that matter?

Mr MENZIES:
LP

– The answer is, “Not with finality “. I assure the honorable member that I hope that before the sessional period ends an opportunity of that kind will be provided, but it has to be worked out in conjunction with the general programme.

page 108

QUESTION

PURCHASE OF DESTROYERS

Mr JONES:
NEWCASTLE, VICTORIA

– My question is addressed to the Treasurer. It refers to the order recently placed in the United States of America for the building of two guided missile destroyers of what is called the Charles F. Adams class. How is the purchase of those vessels being financed? Is it by way of loan? If so, what is the duration of the loan and what are the conditions under which it has been granted? What are the rates of interest, and how will the purchasing of these two ships in America affect our balance of payments and overseas reserves? Were recent loans from the United States of America granted on the condition that these ships were to be built and purchased in America?

Mr HAROLD HOLT:
LP

– I will answer the last part of the honorable member’s question first. The answer is emphatically “No’. There has been no such, condition attached to any loan which this Government has raised on the New York market. Those loans are raised by us from private lenders in the normal way and it has certainly not been a condition of any loan we have raised through the International Bank. I have had the benefit of hearing my colleague, the

Minister for the Navy, explain the reasons why it was found necessary and desirable to procure these vessels in the United States of America. I have found that explanation entirely convincing. Of course, no Treasurer is unmindful of the effect on our external balances of purchases of this kind or of what could be useful employment opportunities if the work could be done effectively and at reasonable cost inside this country. I repeat that the answers which my colleague has to these matters are overwhelmingly convincing. On the points raised by the honorable member which concern the Treasury more directly I shall have a prepared answer made available to him.

page 108

QUESTION

RURAL INDUSTRIES

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– My question is addressed to the Minister for Primary Industry. Did the volume index of rural production for the last financial year show an appreciable increase over that of the previous year, and was it indeed an all-time record? What was the relationship between the rural production index for last year and the index for rural incomes for the same year? Is it estimated that the high production figures will be maintained during this year?

Mr ADERMANN:
CP

– The increase in rural production last year amounted to between 5 and 6 per cent, over the preceding year and it was an all-time record. The figure for last year was more than 50 per cent, greater than the average for the three pre-war years, 1936 to 1939. I think that it was actually 63 per cent, greater, but I am not sure of the exact figure. The honorable member will know that wool realized about 10 per cent, less than in the preceding year and that our average price was just over 52d. per lb. Butter prices were even worse and declined to 249s. per cwt. in London. However, even allowing for that, we were only 5 per cent, down in our overseas realizations for the year. Having regard to the Government’s approach to stabilization projects affecting primary industry, the overall returns have been just 1 per cent, lower, taking the domestic realizations with the export realizations. As to portents for the future, seasonal conditions will have a big bearing on our prospects, but they are reasonably good. “

page 109

AUDITOR-GENERAL’S REPORT

Mr SPEAKER:

– I lay on the table the following paper: -

Audit Act - Finance - Treasurer’s Statement of receipts and expenditure for year 1960-61, accompanied by the Report of the AuditorGeneral.

Ordered to be printed.

page 109

ADVANCE TO THE TREASURER

1960-61.

Statement of Expenditure

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I lay on the table the following paper: -

Statement for the year 1960-61 of Heads of Expenditure and the amounts charged thereto pursuant to Section 36a of the Audit Act 1901-1960 (Advance to the Treasurer).

Ordered -

That the statement be taken into consideration in Committee of the whole House at the next sitting.

page 109

QUARANTINE BILL 1961

Motion (by Dr. Donald Cameron) agreed to -

That leave be given to bring in a bill for an act to amend the Quarantine Act 1908-1950.

Bill presented, and read a first time.

Second Reading

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to effect amendment of the Quarantine Act to facilitate administration of certain quarantine provisions in their application to aircraft arriving in Australia from overseas.

At present, the Quarantine Act provides for the inspection of passengers and crews of vessels - that is ships and aircraft - on board the vessels. This provision has never been, in practice, applicable to aircraft because of the difficulties which would be occasioned. Instead, inspection of passengers and crews of aircraft has taken place at some suitable place in the airport buildings. This bill ratifies the existing practice by making provision for these inspections to take place at a place in the vicinity of the aircraft.

In addition, a reference to inspection of ships’ papers has been clarified to remove any doubt as to whether the reference includes the official papers of an aircraft. I commend the bill to honorable members.

Debate (on motion by Mr. Allan Fraser) adjourned.

page 109

NAVIGATION BILL 1961

Motion (by Mr. Opperman) agreed to -

That leave be given to bring in a bill for an act to amend the Navigation Act 1912-1958, and for other purposes.

Bill presented, and read a first time.

Second Reading

Mr OPPERMAN:
Minister for Shipping and Transport · Corio · LP

– by leave - I move -

That the bill be now read a second time.

In his second-reading speech in the Senate on the very lengthy Navigation Bill 1958, my predecessor, Senator Paltridge, said that be was not unmindful of the fact that our navigation law needs to remain under continual surveillance. He indicated that the Department of Shipping and Transport would be keeping the Navigation Act under review so that, in future, anomalies would be removed when they became apparent, and any amendments made necessary by changing circumstances could be promptly effected, without allowing numerous amendments to accumulate, making necessary lengthy pieces of legislation.

This has been done and we therefore now have before us a bill of 35 clauses drawn up to deal with various matters that have been found to need attention since the 1958 bill was passed. Many of the matters are of relatively minor importance and, I think, need only be referred to in detail in committee. Even the more important matters dealt with, to which I shall now refer, do not involve policy decisions of major importance.

Clause 7 of the bill concerns the manning of ships. Sub-section (8.) of section 43 of the Navigation Act provides that a deputy director or proper authority shall not consent to a master taking his ship to sea with less than four-fifths of the deck complement or four-fifths of the engine-room staff. Where that complement or staff is less than five ratings, authority cannot be given for a ship to go to sea one man short. As in some cases it is perfectly safe, and desirable, to permit a ship to sail one man short in such circumstances, section 43 is being amended to enable consent to be given to the ships being taken to sea. This consent, of course, can only be given if the owner or master of the ship has made all reasonable efforts to obtain the full number of ratings, including the seeking of the assistance of the union, and the proper authority is satisfied it is safe to do so.

Section 90 of the act, which prevents the attachment of a seaman’s wages, is by clause 9 being repealed. When the Matrimonial Causes Bill was before the Senate it was specially amended clearly to establish the liability of a seaman for compliance with a maintenance order. In principle, the protection afforded to seamen under the present act is not in accordance with modern practices and is very rarely availed of by seafarers in the present day. It is clearly practicable that a seaman should rely upon the protection ordinarily afforded by the law rather than the unusual provisions contained in the present Navigation Act.

The amendment proposed in clause 10 is to remove an existing lack of uniformity within the act and to ensure that where, under section 105, the court orders a deserting seaman back on board his ship, instead of imposing a penalty, he is not subject to a heavier forfeiture of wages for the purpose of recouping the shipowner’s out-of-pocket expenses caused by the desertion than he could have suffered had the penalty been imposed. The main effect of the amendment is to ensure that if, at the request of the shipowner, the deserting seaman is sent back on board his ship, any forfeiture of accrued wages to meet a shipowner’s expenses occasioned by reason of the desertion shall not exceed the amount of the maximum penalty that could otherwise have been imposed.

Clause 14 deals with the official logbook of a ship. At present, section 171 requires that an official log-book shall be kept and prescribes also in respect of the entries to be made therein. It is desirable that matters of detail such as the entries to be made in a log-book be dealt with by regulation rather than in a statute, and clause 14 amends section 171 for that pur pose. 1 would like here to give an assurance that what is at present prescribed in the act for the protection of masters and seamen in this matter will be covered in the regulations. The amendment of section 171 will not, of course, be made effective until the regulations are ready for promulgation.

My department has been seriously concerned that prosecutions in cases of serious offences against the vital safety provisions in the Act relating to the overloading of a ship have resulted in only light fines being imposed. The maximum penalty for such an offence is now £500, but under clause 20 of the bill, section 219b is to be amended to double that maximum to £1,000. The higher penalty is more appropriate as the overloading of large vessels can confer substantial profits. This gives an indication of the serious view which is taken of this type of offence.

As in section 171, to which I have referred, there are also matters of detail prescribed in section 271 which would be more appropriately dealt with by regulations. In this instance, the subject matter concerns hospital accommodation in ships. Clauses 25 and 26 provide the necessary amendments. Here again, I undertake to ensure that the matters prescribed in the ac will, in substance, be carried on in the regulations.

Section 420 of the act, as inserted by section 200 of the 1958 act, gives the Minister power to cancel or suspend certificates of competency of masters, mates or engineers of ships where the holder has been convicted of an offence in a Commonwealth country. Clause 32 provides for a new section 420 which will extend the Minister’s power in this matter in three desirable respects. Firstly, it will enable the Minister to deal with a certificate irrespective of where the holder has been convicted, instead of it being limited to convictions in a Commonwealth country. This amendment is being made because of a United Nations Economic and Social Council recommendation that the certificates of a merchant seafarer should be cancelled if the person was convicted of an offence against narcotic laws.

Secondly, clause 32 will enable the Minister to re-issue a certificate in a case where a certificate has been cancelled, or to grant a certificate of a lower grade, if he thinks the justice of the case requires it.

Thirdly, the clause remedies the present position in which the Minister cannot deal with a certificate of competency issued under this act which a court of marine inquiry or other tribunal established under the law of a State has cancelled or suspended so far as concerns its validity in the State. A case a little time ago emphasized the need for this power, and amendment accordingly was suggested by the Attorney-General’s Department.

Clauses IS, 16 and 17 of the bill are complementary and are designed to provide statutory authority for what are known as “ running “ surveys of ships, which are surveys carried out over a period, during which various parts of the ship are surveyed at different times, to avoid delay to the ship. The amendments will ensure that, in keeping with the established annual survey principle, each part which is surveyed under such arrangements is again surveyed within a period of twelve months, thus having due regard to the provisions of the International Convention for the Safety of Life at Sea.

The bill, in clauses 21 and 22, effects an amendment of sections 229 and 230 of the Navigation Act which deal with signals of distress and urgency. This is another case where it is considered it would be more appropriate for matters of detail to be prescribed by regulation rather than in the act, and here again the necessary provisions will be transferred to the regulations, which will provide flexibility in dealing with offences arising out of the improper use of such signals.

For many years, nearly all courts of marine inquiry under the Navigation Act were constituted by a judge of the Supreme Court of the Australian Capital Territory. At present, these courts are being constituted by the Chief Judge of the Commonwealth Industrial Court. The Attorney-General is of the opinion that if such courts are to be presided over by a judge of Supreme Court status, it is inappropriate that an appeal should be to another Supreme Court judge, as at present provided in section 375b. Clause 30 therefore amends section 375b and provides that appeals from a Commonwealth court of marine inquiry will lie to the Commonwealth Industrial Court.

Clause 2 has been drafted to enable various sections to be brought into force at different times, when all necessary prior action has been taken. Clause 35 is a saving clause for the existing regulations.

Apart from the matters which I have dealt with in a little detail, the content of the bill is concerned with relatively minor matters such as drafting amendments and improvements to facilitate the effective operation of the sections concerned. The bill is designed further to improve the effectiveness of the act and, having in mind the importance of maintaining our seaways and the protection of those who sail in our ships, it is intended in the future to continue this policy of regular amendments at fairly short intervals. I commend the bill to honorable members and feel sure that they will give it their support.

Debate (on motion by Mr. E. James Harrison) adjourned.

page 111

WOOL TAX ASSESSMENT BILL 1961

Second Reading

Debate resumed from 15th August (vide page 22), on motion by Mr. Adermann -

That the bill be now read a second time.

Mr SPEAKER:

– There being no objection, that course will be followed.

Mr POLLARD:
Lalor

.- This measure is designed to impose a levy of 5s. on every bale of wool produced in Australia from the commencement of the woolselling season at the end of this month to the end of next year’s selling season. The Opposition appreciates that wool-growing is Australia’s major primary producing industry in that it is responsible for earning 36 per cent, of Australia’s total export income.

To some extent, the industry has fallen on evil days. For a number of years, it has been the victim of the machinations of pricefixing rings. It finds itself, at least to some degree, in competition with synthetics. Generally, the industry is in a position where it needs the aid of this Parliament, both in the promotion of its products in Australian and world markets and to protect it against the machinations of the buying rings which operate not only here but also from other countries.

The measure before the House is related primarily to promotion. There are several points I want to make on wool sales promotion, and although this may not be the place in my speech in which I intended to refer to them, I want to make them now in case I overlook them later. Some months ago in this Parliament, I directed attention to the fact that while I was in Sydney with some hours to spare, I went window shopping, and I could not find a new woollen tie anywhere. Subsequently, I went to two of the largest emporiums and many shops in Melbourne, and devil a wool tie could I buy. Recently, I went to a little shop in Swanston-street and, lo and behold, I picked up two pure woollen ties for 7s. 6d. each. They are Klipper ties, as good a tie as any produced by mankind. They keep their position, wash well and last almost indefinitely. They appeal to my part-Scotch instincts.

The position regarding the supply of woollen ties is bad enough, but apparently nothing has been done to remedy the situation. The shops are teeming with thousands of ties of synthetic materials known as Boston ties and by all sorts of other fancy names. It is true that if you search hard enough, you will find in an obscure corner a rack carrying some woollen ties, but they are limited in variety and design and are only suitable for wearing with a sports shirt. They will not fit comfortably around an ordinary shirt collar.

That, in itself, is bad enough from the promotion point of view; not that woollen ties absorb a vast quantity of wool, but if you can promote the sale of woollen ties, you have the psychological effect of people being satisfied with the goods they are using, and that fosters the sale of other woollen products. But the most astonishing discovery I have made is that this Government, which introduced and supports the wool levy, announced the other day through its spokesman, I presume, that there has been a review of the dress of members of the Royal Australian Air Force. Lord help us, Mr. Speaker, do you know what has been done? The men of the R.A.A.F. are to be equipped with silk ties!

Mr Forbes:

– Why do you not check your information?

Mr POLLARD:

– It has not been denied, according to the press, and nobody has directed attention to it in this House. Somebody might have taken exception to the proposal and altered the ill-advised decision of the Government; but it would be awful to see members of the Royal Australian Air Force equipped with synthetic silk ties when we could manufacture in Australia, from our own product, ties with durability equal to anything in the world.

The plain fact is that all the Melbourne and Sydney emporiums are full of silk ties because of the failure of this Government to continue import prohibitions and licensing. These goods not only are competing with wool but are imported from other countries and also are exceedingly expensive. 1 do not know why the stores slock them. Perhaps the manufacturers of synthetics allow a larger margin of profit than is allowed by the manufacturers of woollen ties.

The honorable member for Barker (Mr. Forbes) asked me a few moments ago why I did not check my information. All I can do is to direct the attention of the Government to the announcement that it is intended to equip members of the Royal Australian Air Force with new silk ties, and a design has been chosen.

The Opposition has a proud record of assistance to the wool industry. We realize its importance to the Australian economy. It is interesting to note that in his secondreading speech, the Minister for Primary Industry (Mr. Adermann) said that in 1936, a levy of 6d. a bale was imposed on wool to establish a fund to assist the wool industry. Not much more was done in that connexion, and at that time no contribution was made by the anti-Labour government of the day. But in 1945, the Wool Use Promotion Act was introduced imposing a levy of 2s. a bale on wool-growers and for the first time in Australia’s history, under a Labour government anyhow, an equivalent amount was contributed from consolidated revenue. The contributions in that year amounted to £300,000 from the wool-growers and £300,000 from government sources.

That money was utilized by the Australian Wool Board under the chairmanship of Sir Douglas Boyd. It did excellent work with the funds at its disposal. The fund was also used for research purposes after consideration by an authority representative of the textile manufacturers, trade unions, the Commonwealth Scientific and Industrial Research Organization, government departments and others. About 1952, the act was amended and the authority for the promotion of the sale of wool became known as the Australian Wool Bureau. Until this measure comes into operation, the funds at the disposal of the bureau have included 5s. a bale from the wool-growers and revenue from other funds which the Commonwealth Government obtained from different sources. I need not enumerate them now.

Within the limits of its financial capacity, the Australian Wool Bureau has carried out such work as it considered necessary for the promotion of the use of wool in Australia and in other parts of the world. Recently the chairman of the bureau, Sir William Gunn, suggested that the consent of the wool-growers be obtained to an increase of the levy from 5s. a bale to something in the vicinity of 18s. or £1 a bale. At the initiation of the campaign, many thousands of wool-growers and their organizations, smarting from the impact of the activities of wool-buying agents and authorities, whose nefarious pieing and ringing operations had been discovered, took exception to the proposal to impose a higher levy until satisfactory action had been taken by the Government to ensure that adequate protection was given to growers against the operations that Mr. Justice Cook described. I think there was some merit in the point they took.

It is quite true that the growers are organized into two main groups. There is the Australian Woolgrowers and Graziers Council, to which my friend from Riverina (Mr. Roberton) would belong, and running parallel to it, representing almost identical groups of growers, is the body known in the federal sphere as the Australian Wool and Meat Producers Federation. In Victoria, the organization is known as the Victorian Wheat and Wool Growers Association and in Western Australia as the Western Australian Wool and Meat Producers Association. The Federal Graziers Association, which, because of its attitude generally to organized marketing and other matters, I might term the more conserva tive body, fell in very strongly with the proposal of Sir William Gunn for an increase of the levy to £1 a bale.

On the other hand, the Victorian Wheat and Woolgrowers Association and the equivalent organizations in Western Australia and other States were sharply divided. The Victorian organization intimated thai until marketing was better organized, it was absolutely opposed to any further levy for promotional purposes. Sir William Gunn embarked on a most arduous and energetic campaign. In Victoria he addressed meetings at Hamilton, Horsham and other widely separated centres. In the western district, at Hamilton in particular, he met very strong opposition to the proposal to increase the levy before better marketing was organized. At one meeting attended by some hundreds of growers, a suggestion that the proposal of Sir William Gunn be supported was rejected and the meeting limited itself to a vote of thanks to Sir William Gunn for his very able address. 1 understand that the Western Australian organization adopted a similar attitude. When the matter came before the federal body for a decision, a suggestion that a modified increase of 5s. only be accepted for a limited period was adopted on the casting vote of the chairman, Mr. Heaslip, a Liberal member of the South Australian Parliament.

Mr Kelly:

– No, that is not right.

Mr POLLARD:

– Then I withdraw that description. Apparently I have done him an honour he does not deserve. Mr. Heaslip was the delegate from South Australia and he voted in favour of an additional levy of 5s. being imposed for less than one year.

On the decision of the more conservative organization, the Government has introduced this legislation. The invariable practice of the Australian Labour Party has been to support the voice of the organizations which will find the money. I remind the Government that many growers who have been very articulate and probably a majority of growers, some of whom c’o not take a sufficient interest in their organization, are most bitterly opposed to the imposition of an extra levy of 5s. a bale at a time when most of them, including returned servicemen and the smaller growers, are receiving inadequate incomes from the sale of their wool. At Hamilton, on 29th July, a meeting attended by 225 representative wool-growers of the district was held, and that is a very big meeting.

Mr Duthie:

– Was Malcolm Fraser there?

Mr POLLARD:

– I would not know. The meeting, with only three dissentient votes, carried a resolution opposing the increased levy. That is a very large proportion of growers and that degree of opposition runs right through Victoria. The Victorian delegate to the meeting of the federal body voted against the imposition of the increased levy, so there is by no means unanimity amongst the members of the organization. I sympathize with them deeply, because I see the position, I think, with great clarity.

The situation confronting us is this: There is no doubt that wool prices are tampered with by buyers’ organizations. Any illusion that this is not so has long since been dispelled and the result is that in any one year, Australia can be deprived of between £100,000,000 and £150,000,000 of its export income. Running alongside this situation is the clear position that right up to the present, at the end of every woolselling season, the whole of Australia’s stocks are sold and cleared absolutely. No problem of a surplus confronts Australia. In view of the fact that we are the world’s largest exporter of wool, we could, with New Zealand and South Africa, form a very strong protective selling ring. The obvious need is to act in concert as the buyers have acted and so exercise a powerful influence in determining the price we will accept for our wool.

But the clamour for such organization has. to my mind, been diverted by a very strong intensification of the campaign for promotion as a solution of the wool- growers’ problems rather than the exerting of pressure on the Government togive statutory authority to a wool-selling organization. This is an immensely more urgent need than is promotion. Whilst it is said that synthetics and cotton are increasing their sales at a greater rate than is wool, it is still true that the market for wool is expanding and that, with an increase in the world’s population of 55,000,000 eachyear, there is, in my opinion, no possibility of either synthetics or cotton ever displacing wool, with its inherent virtues, as the most preferred fibre. It may be a humble opinion, but it is certainly supported by experience of the past. While it is true that these other commodities are continually increasing their usage, it is also true that the usage of wool continues to increase. I agree that some promotion is necessary, but I believe that with the limited amount of promotion that is now carried on, together with the assistance given by the work of the scientists, and having in mind the increased purchasing power in many parts of the world, the Australian wool-grower can be more adequately protected to-day than he has been protected in the past.

The emphasis that has been laid on the wool promotion campaign has, I believe, been quite out of proportion to its importance. The daily press, of course, has taken its cue from the more influential sections of the wool-growing industry, the richer and more powerful sections, and from the publicists of the Australian Wool Bureau, whose endeavour it is - and quite rightly - to push their own barrow to increase their promotional activities and to obtain more finance for this purpose. The daily press of Australia has continually harped on and emphasized the importance of wool promotion. I do not think I have an evil mind, but it seems to me that men and women sometimes harbour prejudices unconciously and, as a result, sometimes peddle the lines which may have very decided financial benefit for them. It is obvious, of course, that if more money is made available for promotion, then the daily press, not only in Australia but also in other parts of the world, and the wireless and television interests that are almost completely controlled by the daily press, will receive very considerable amounts of money from the increased levies paid by the wool-growers of Australia.

Mr Adermann:

– The shortage of woollen ties, to which you directed attention, shows the necessity for promotion.

Mr POLLARD:

– I have never denied that promotion is necessary, but I have said, and I still believe, that the marketing aspect is more important. We have a total clearance of our product and no surpluses. Although I believe this, I am. not going to undermine the support that the Australian

Labour Party in this Parliament has given to promotional activities from the time such activities were first undertaken. As I say, we support promotion, but I think that some criticism should be voiced from time to time of the promotional authorities without any personal venom.

I made some inquiries whenI read that a firm called Personnel Administration Proprietary Limited had been engaged by the Australian Wool Bureau to make inquiries overseas concerning wool marketing, wool promotion and kindred matters. I asked a question in this House, although I cannot remember to which Minister I addressed it, as to who were the members of this firm of consultants. The Minister, however, did not know. I later asked whether I, as a member of this Parliament, could have a copy of the report made by Personnel Administration Proprietary Limited to the Wool Bureau. I also asked what the inquiry by this firm had cost. I made this request not only as a member of this Parliament, but also as a grower. After all, I also pay the levy. I was told that as the report made by this firm ran to 200 pages, it could not be made available. However, the Minister told me he would be pleased to let me have an epitome of the report. I have that before me now. It is a very dull document of about eight pages. I was also told that this report was the result of an investigation for which the firm in question was paid ?23,000. The Minister was good enough to write me a letter about the matter, in which he said -

In response to your question in the House on 11th April I undertook to let you know the cost of the consumer market survey carried out on behalf of the Australian Wool Bureau by Personnel Administration Limited. The Australian Wool Bureau, which was contacted with a view to obtaining this information, advised that the total cost of the survey was ?23,500-

A lot of money! -

In conveying this figure to me, the Bureau pointed out that this sum covers an investigation extending over twelve months and involving field surveys by three investigators in the United Kingdom, on the Continent, in the United States, Canada and Japan.

The portion paid in the year 1959-60, namely ?15,992, was recorded in the published accounts of the Bureau.

Then the Minister was good enough to send me this summary of the report. Well, bless my soul, if this is all we got from the firm of consultants for ?23,000, it is condemned on the summary alone.

What is this Personnel Administration outfit, anyhow? I found in a press cutting the other day this interesting item -

Sir Douglas Copland

A most capable gentleman - director of the Institute of Labour Studies at the International Labour Organization, Geneva, has resigned as chairman of Personnel Administration (Australia) Proprietary Limited, Melbourne management consultants.

So we find that Sir Douglas Copland was the chairman of this outfit, which received ?23,000 for its investigation.

What do we find from this summary? I cannot read all of it, but I shall direct attention to its salient features. First it tells us, “ wool is in danger “. I have been told that ever since I was a little boy. Now this report tells us that wool is still in danger. No survey was necessary to find that out. Then the report says -

Wool producers have been out-researched and out-promoted by young and vigorous competitors.

We did not have to be told this, either. The report goes on -

The wool industry … is made up of hundreds of thousands of producers scattered over the earth’s surface-

How profound! - with consequent difficulty in acting as an integrated unit. Nor has the industry matched the tremendous financial investments of synthetics producers in research and promotion.

Anybody can find that information in any worthwhile library. The report then says - “ Wool is still the superior fibre.” Of course it is! Then a reference is made to our loss of a large part of the American market. Well, we can get that information from statistics concerning the industry published in many countries. The report then informs us -

The American situation will recur in other markets.

Then it carries information under headings such as -

Japan As Our Largest Customer.

Under-developed Countries- Our Future Markets.

The Promotion Plan.

The report then tells us -

In the light of what has already happened in U.S.A., where a substantial and increasing share of the market has been lost to synthetics-

Well, of course, we all knew that our market in that country had been largely lost to synthetics. The report then makes a number of recommendations. It says that we must have management leadership in these matters. That is obvious. It says, further, that there must be co-ordination of research. We all know that this is important. It says that there must be practical application of the research, and that we must study the fashion market. Well, I had an idea that that was necessary. Then it tells us that publicity is important. Naturally it is. It says that we must have branches and budgets, and then, in conclusion, the report tells us -

It is the strong view of your consultants that the present funds available are quite insufficient to meet the- needs-

The consul: ants did not have to be so concerned about that aspect; they got their cut- and unless the additional funds required are made available, the outlook for the Australian woolgrowers can only be regarded as hopeless.

How profound! .We paid £23,000 for this information which any one could have ascertained from journals available in departmental and parliamentary libraries, or journals that can be obtained from other countries. This is what we got for our money from an outfit of which the chairman was Sir Douglas Copland, a man with whom I have a personal friendship, and for whose very great ability I have a profound admiration.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– You should have a profound admiration for his financial ability.

Mr POLLARD:

– Well, I would like to know how this money was dissipated. However, if this is the sort of information that we are going to obtain through an authority which is levying more money from the wool-growers in order to advance promotion, I am rather disappointed. I know that we must have specialists and experts and that we must have publicity for all kinds of purposes, but it seems rather futile to have a three-man team going around the world for twelve months to find out the obvious. I do not know what these three men could have been doing. I suppose the remainder of the original report comprises an extensive pile of statistics. The honorable member for Wakefield (Mr. Kelly) seems very interested in this matter. L will ask him. whether he has seen the full report..

Mr Kelly:

– I have not.

Mr POLLARD:

– Has anybody in this Parliament seen it? The honorable member has seen only what I saw. We growers pay the wool levy and we do not know what £23,000 was actually paid for. 1 do not want to harp on that, but these are things that rather irk people. I am an admirer of Sir William Gunn- and of the work done by the organization which he leads. Nevertheless, I think that criticism is sometimes necessary, and I- consider that, in this instance, that organization was bitten.

The next matter that I want to mention is the need for organized marketing, which is a related subject. The average price received for wool in 1960-61 was 5.72d. per lb. less than that received in 1959-60. In round figures, that would mean £40,000,000 over the year. The average price in 1959-60 was lOd. per lb. better than that in 1958-59.

Mr Kelly:

– What has this to do with the bills which we are discussing?

Mr POLLARD:

– Everything, in my opinion. The honorable member can tell us his opinion later. The graph representing the movement of wool prices in the period from 1952 to 1960, which I have obtained from material processed, I think, by the Australian Wool Bureau, shows a horrible situation. It shows that growers who work equally as hard as others may receive less for their wool simply because their wool hits the market six months earlier or later. The graphs of the prices of the fibres which are competitors of wool do not dip as does the graph of wool prices, but are almost straight lines across the chart. Those competitors of wool to which I refer are terylene, nylon, Courtelle and cotton. The cotton producers in the United States of America and the manufacturers of terylene and nylon fibres do not receive less for their product in May than it brings on the market in October. They are not subject to the wicked injustice inflicted on wool-growers who receive less for the product of their labour than is received by their friends who sell a similar product at a different time of the year.

Here, the wool-growers are subject to the vagaries of the buyers. Unfortunately, we in Australia have also become the victims of a wool futures market which has had the blessing of this Government. All I can say about the wool futures market is that it interposes an additional element between the wool-grower and the buyer, and that element must be paid for. It provides a facility which is, in effect, a gambling machine. In most instances, some one wins, but the grower does not. The winner is somebody between the grower and the buyer who takes out profits from a book-keeping service or in some other way.

It is a most remarkable thing that after organizations of wool-buyers had been found guilty - I do not mean that they were sentenced to imprisonment or punished in some other way under the criminal law - of engaging in organized buying rings known as pies, there appeared in the press reports that a regulation that would eliminate this sort of thing had been approved in New South Wales. When these reports of such a regulation appeared, woolgrowers came to me and said, “ There has been gazetted in New South Wales a regulation which prevents wool-buyers from engaging in pies any more, and it has the blessing of the New South Wales Government “. The word “ regulation “ is normally used in reference to the rules of a government organization. There is in New South Wales no governmental regulation as such to regulate the conduct of the woolbuyers’ organizations. The rule in question is purely a new self-imposed one under which the buyers undertake not to engage in pies. However, this undertaking will be no better observed than was the one given by the banks to the Prime Minister (Mr. Menzies) when he asked them some years ago to curtail credit in certain fields. That undertaking has been broken in a number of ways. The establishment of the wool futures market after the buyers had been found out in their price-depressing activities in pies has merely added another element. One cannot blame the buyers for adopting the device of the futures market. It is a feature of commercialism.

Mr Cash:

– I rise to order. Mr. Deputy Speaker, the subject of wool pies does not appear to come within the scope of the measures under discussion. They relate to the wool tax and to wool promotion. I suggest that wool pies are outside the scope of this debate.

Mr DEPUTY SPEAKER (Mr Wight:
LILLEY, QUEENSLAND

– Order! Up to now, the honorable member for Lalor has, I think, related most of his argument to the subject-matter of the bills now before the House. I am prepared to allow him to continue on the understanding that he relates his remarks to the bills.

Mr POLLARD:

– I shall endeavour to link my remarks with the bills, Mr. Deputy Speaker. I am sorry if I have transgressed the rules or hurt the honorable member for Stirling.

The most remarkable thing about wool pies is that the buyers, after they were caught out in the activities in which they engaged in these pies, turned to futures operations. If you look up the list of those buying organizations which are indulging in futures operations, you will find that almost without exception they are firms which were in the pie joke. They have merely turned from the pie joke and entered into the futures joke. This is a bitter pill for the Australian wool industry.

I think I have said enough, Mr. Deputy Speaker. I do not know how much time I have left, but I could say plenty more.

Mr King:

– The honorable member has not yet given us the solution to the problem.

Mr POLLARD:

– I have given the honorable member the solution. I regret that the Government, despite all the information that is available in the archives of this country and the experts who are available for consultation, has seen fit to delay the taking of a poll of growers to get an affirmative vote in support of the constitution of a marketing organization and has resorted to the subterfuge of appointing a committee of inquiry of three members.

Mr Turnbull:

– That is not fair. The honorable member has been fair up till now. I ask him to continue to be fair.

Mr POLLARD:

– Is the honorable member hurt, too?

The three gentlemen who comprise the committee of inquiry have undertaken a perambulating inquiry seeking out the pros and the cons and obtaining information which is already available for the seeking from growers’ organizations and in the archives of this country. I only express the hope that the committee of inquiry will submit recommendations that will have the effect of forcing the Government to implement a proper system of wool marketing.

After all, Mr. Deputy Speaker, this is ancient history. I have with me the report of the Commonwealth Wool Inquiry Committee, which was appointed in 1932 as part of a delaying operation. Remarkably enough, the situation was so serious in 1932 that this committee made the following recommendation: -

Prohibition of Export. - It is further recommended that the Commonwealth Government should, by regulation under the Customs Act, or by such other action as may be necessary, take to itself power to prohibit the export of wool, except on conditions as to minimum reserve price or otherwise as may be prescribed, provided that this power shall be exercised only at the request of the Commonwealth Wool Executive.

The position was desperate then. It has become desperate to-day.

I hope that my remarks on these bills will achieve something for the industry which is our greatest export-earner and for the people who do the hard work which is done in that industry.

Mr FAIRBAIRN:
Farrer

.- Mr. Deputy Speaker, these bills relate to wool promotion; yet the honorable member for Lalor (Mr. Pollard) spent most of his time discussing, not the promotion of wool, but wool marketing. I have not the time to do likewise, nor do I want to follow the ramblings of his mind through his ideas on wool marketing. I know that a number of honorable members wish to speak, and therefore I shall limit my remarks as much as I can. I know that this bill must pass through both Houses and receive the Royal Assent before the first sale on 28th August, but let me reply very briefly to one or two observations that were made by the honorable member for Lalor who seems to think that he has the panacea for all our ills. According to him, all we have to do is to implement the kind of marketing scheme that he advocates; not to worry about an inquiry and not to bother about getting the most capable people available and asking them to take evidence from every one con cerned in the industry. According to the honorable member an inquiry is only a subterfuge to delay taking action because he claims to know what the result of the inquiry will be.

We know that there are at least four different methods by which the Australian wool clip can be marketed. All of them could, and perhaps would, operate effectively. They are, the open auction system, a floor price scheme with an open auction, and the building up of the Goulburn wool export organization into a kind of growers’ co-operative, thus bringing in another buyer. In effect, there then would be a floor price if that company had sufficient capital to be able to buy in, hold on to the wool and put it back on to the market at a later date. Then, of course, we could have the appraisal system but these are matters that will be dealt with in the report which we know will be available to the Government before the commencement of the next woolselling season. 1 have always regarded the honorable member for Lalor as a fairly commonsense, down-to-earth, kind of person, but I am staggered at the way in which he repeats the futile argument that because all the wool produced is consumed, all we have to do is to find some new system, of selling and then immediately jack up the price by 50 per cent, or 100 per cent. It is futile to claim that all the wool produced is consumed. For instance, some goes into tops and stands for some time before it is used in, for example, worsted clothing. It is not consumed immediately. But even if it were, the demand for wool regulates the price. To illustrate my statement let me mention a stock sale that I attended very soon after the end of the war. The southern part of New South Wales in which I reside was experiencing a very bad drought and, although all the sheep for sale were being sold, they were not being sold at satisfactory prices. No doubt the honorable member for Lalor would have found some floor price system to bump up the price of the sheep. I can remember the auctioneer going to one pen in which were about 140 old cracker ewes. Looking through the dust at the people gathered around the pen he asked, “ Can I get one penny anywhere “? No one would pay one penny a head, and eventually he said, “ What about £1 for the lot “? and some one replied, “ Right “. It was not until later that the buyer realized that he had paid nearly 2d. a head for the sheep. This illustrates my point that demand regulates the price, noi the fac that all the wool will be used. I have attended some stock sales at which the price was high and all the stock was not sold. For heaven’s sake, let us realize that we shall increase the sale of Australian wool in the world only by promotion. 1 welcome this bill, first, because 1 am convinced that we must use promotion to the greatest extent, and, secondly, because it is one of the first signs for a very long time of co-operation between the various wool-growers’ organizations. What little time the honorable member for Lalor devoted to anything but wool marketing he devoted to telling us that members of the Australian Wool and Meat Producers Federation were opposed to this proposal. Then he concluded his speech with the magnificent remark that he hoped he was doing something for .the wool-growers in Australia. The greatest good that he can do for the wool-growers in Australia is to try to get the two great organizations to co-operate in the future much more than they have in the past. I congratulate the people who have succeeded in achieving the present state of co-operation, in particular the new presidents of the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation, respectively. Those two gentlemen have agreed also that next year, when the result of the inquiry is known, they will come together again and discuss the implementation of the committee’s recommendations, 1 congratulate also Sir William Gunn, chairman of the Australian Wool Bureau, who fought for a very long time to achieve what he and the bureau realized to be an absolutely necessary objective. It is interesting to point out that the member of the Australian Wool Bureau who moved the original resolution advocating raising the promotion levy to £1 a bale in five years’ time is a member of the Australian Wool and Meat Producers Federation. That resolution was seconded by Sir William Gunn, as chairman, and was passed unanimously. However, although it was not received unanimously by the organizations concerned, thank goodness it was approved by a majority and now we are about to pass legislation to implement the resolution.

We should congratulate also the Minister for Trade (Mr. McEwen) and the Minister for Primary Industry (Mr. Adermann), who played a major part in bringing the organizations together and in pointing out to them the necessity for the increased levy. We hope that the present co-operation between the two organizations will continue. Much more work remains to be done.

Undoubtedly, after the findings of the committee of inquiry are known, there will be a need for co-operation so that any recommendation relating to marketing, promotion or any other matter can be implemented. A large number of people share my feeling that the Australian Wool Bureau should be re-organized. At present, the bureau consists of three wool-growers from the Australian Woolgrowers and Graziers Council, three wool-growers from the Australian Wool and Meat Producers Federation and one government representative, who. I think, is also a wool-grower Undoubtedly, what those people do not know about making wool into textiles would fill a number of books. We feel that the bureau should include scientists from the Commonwealth Scientific and Industrial Research Organization and people from other sections of the wool industry and retailers who could contribute something towards improving the manufacture and marketing of wool. Irrespective of how successful a wool-grower may be, he does not know the full story about wool. That has been one of the greatest weaknesses of the present set-up.

I point out to the honorable member foi Lalor that promotion undoubtedly increases the demand for wool. This has become apparent in the United States of America, which, probably more than any other country in the world, has been subjected to the splurge of ballyhoo advertising associated with the attempts to introduce newsynthetic fibres. No doubt this advertising has had a tremendous effect. The manufacturers of synthetics have been spending, on the average, about 5 per cent, of their total gross annual return on promotion By comparison, the Australian wool-growers have been spending one-half of 1 per cent of their total gross annual return in this way. Even when this bill becomes law. the percentage will still be a little under 1 per cent. A few years ago there was a terrific advertising splurge in America about a “ miracle “ fibre. The people were told that wool was finished and that synthetics would replace it. We know now that the so-called miracle fibre is not a miracle fibre at all. In fact, it is only a second-rate fibre. It has held its position in America because it hides behind a tariff barrier which increases the price of imported Australian wool by 50 per cent. The mills have no alternative but to buy the locally produced wool, which is of very poor quality. We know that wool classing is almost non-existent in America. I have seen a bag filled with wool, wrapped and labelled “ Ewe “. By comparison, under our system of classing we have at least 1,200 different lines and there may even be subdivisions of those lines. One can therefore realize that American wool manufacturers have no opportunity of buying good wool at a reasonable price. If they buy American wool, it is only a by-product of mutton. They have to class it and make the best they can of a mixture. In addition, as soon as made-up cloth equal to 3 per cent, of the total manufacture of American mills is imported, a very high tariff comes into operation, which almost prohibits the importation to America of any additional quantities.

All of these conditions support the synthetics industry. They do not help the American producers of wool, but only keep the manufacturers of dacron and like products going. As a matter of interest, and to test the quality of synthetics in America, I allowed myself to be talked into buying a suit made of synthetic material. It was one of the worst purchases that I have ever made. Off the hook, it cost 65 dollars, which is equal to about £35. Very often it looks as if one has slept in it. The ordinary American evidently requires only the sort of suit that he can throw into the Bendix washer, hang up to dry and put on again. I must say that at least one can use an iron on the suit that I bought. If one used an iron that was a little too warm on some of the original synthetic materials, the iron went straight through. The materials now produced are certainly better, but it is no wonder that the ordinary American looks so slovenly when he wears suits made of synthetic materials. Thank goodness, there are still some Americans who appreciate being well-dressed and who get good worsteds and have them made into decent suits.

In addition to opportunities to sell our wool in America, there are tremendous opportunities in other parts of the world. There are opportunities in Europe, where, I do not doubt, much of this promotion money will be spent. For example, we have no representative of the Wool Bureau in Scandinavia, and I believe that it is intended to promote and encourage the use of wool there. Other countries of Europe, such as France and Italy, take great quantities of Australian wool. France is our third largest buyer. Bradford, in England, has been disappointing in recent years. For some reason, Bradford seems to have dropped behind. Japan has taken greater quantities at better prices. Although there are notable exceptions, some of the Bradford mills appear to have out-of-date machinery and do not seem to be worried about turning out the newer types of cloth or applying the new findings of the Commonwealth Scientific and Industrial Research Organization. Undoubtedly, the fall in the percentage of wool taken by Bradford has, more than anything else, led to a fall in the total consumption and the price of wool.

We know that there are markets in Asia that can be explored. They are not very great at present. Some Asian countries are in the tropics, where wool would not have the same advantages as elsewhere. In addition, the level of wages is very low and most of the Asian people are unable to afford to purchase the various woollen goods that we would be likely to send there. However, there is a great opportunity for furthering sales in Asia. We could encourage blends. The Wool Bureau is somewhat like Nelson, holding its spy glass to its blind eye and saying that it cannot see any blends. I know that in some cases we want to promote products made of pure wool and not 80 per cent, blends, but if we feel that we can increase the consumption of wool by promo ing blends, let us do it, and encourage an increase in the percentage of wool from 40 per cent, to 60 per cent.

I told my colleagues that I would speak for fifteen minutes; I have spoken for fourteen minutes. I commend the bill.

Mr CLARK:
Darling

.- I wish to support the proposal before the House. It is high time that something was done to further assist the wool industry in the promotion of greater sales and greater use of its product. Wool is the backbone of Australian industry. In the case of the meat industry, we had a contract for the sale of meat at a guaranteed price over a long period of years, which has been extended further. Something should be done to establish price stability for wool, as stated by the honorable member for Lalor (Mr. Pollard). I think that price has something to do with the marketing of the product. If we can increase the demand for wool, we can hope to get a more stable and better price for the product.

The need to increase propaganda for the sale of wool is obvious. Every product that is sold to any large extent, whether it be soap or anything else, is marketed by an extensive propaganda and advertising campaign. Undoubtedly, advertising is one of the chief influences on sales to-day. Now that we are faced by tremendous competition from synthetics, wool cannot hope to hold its position in the markets unless some advertising is done to emphasize the advantages of wool over synthetics.

About eighteen months ago a conference in relation to military clothing and general stores was held in Canberra. Dr. Kennedy, an eminent American authority on wool, attended that conference. He was chief of the United States Textile Clothing Group and Quartermaster, Research and Engineering Command, United States Army. He pointed out that wool faced tremendous competition from synthetics and could not expect to take as big a share of the clothing market as was taken by synthetics. He said that three major factors were militating against wool on the United States market. There were new trends in clothing. Overcoats were being worn less and less and synthetics were replacing wool in overcoats. There was a fashion trend amongst men, and particularly amongst women, towards lighter fabrics, and wool was being displaced by synthetics in casual clothes for men. As has been previously stated, it is said of many suits worn by Americans that one can wear them under the shower to wash them. I saw one such suit that a chap brought from America. He said that he had been under the shower in it, and had washed it. I replied that, looking at it, one could see that it had been under the shower. It was all creased and wrinkled. A woollen suit made of the finest tropical fabrics would have kept its appearance far better and would have greater wear and comfort. There are many light-weight woollen fabrics on the market, particularly in Queensland, which are competitive with other materials and far superior in many respects.

In America there is a trend towards washandwear clothes. Research being carried out into the treatment of wool will facilitate its use for that purpose. The experiments on non-shrinking processes have done much to increase sales of wool. I think that these processes can be improved and the demand for wool still further increased. The Si-ro-set process and treatment to produce washandwear qualities will be a contributing factor in the sale of wool. I think that a campaign, in order to be successful, has to be carried out by some very experienced advertising concern, and that the great stress in advertising should be laid on the ways in which wool is superior to synthetics. In fact, wool starts off with a very great advantage, because it has many qualities that synthetics do not have and which probably could not be achieved in synthetics. The force of advertising is a very important thing in the modern world. The synthetics industry in America spends many millions of dollars in trying to overcome the competition of wool. So any campaign to get substantial funds to promote the sale of wool is well justified.

I have been told that one firm has stated that it could sell many hundreds of thousands of pounds of knitting wool in the United States, but that the expensive advertising campaign which would be involved would be quite beyond the firm’s own resources. So I think that the wool organization, with the funds which will now become available to it, should launch a campaign of this kind in an effort to increase the sale of knitting wool in the United States as well as elsewhere. I think that once knitting wool came into wider general use its use would extend, and the market for it would improve considerably.

Labour governments in the past have been sympathetic to the promotion of the interests of the wool industry. In 1945 the then Labour Government facilitated the passage through this Parliament of legislation to increase the levy on wool from 6d. to 2s. a bale. This levy was increased progressively in 1952, 1960 and 1961. However, one would think that the present Government, intending to raise millions of pounds of money from the wool-growers for expenditure on promoting the increased consumption of wool, would itself give substantial help in this regard. I am not satisfied with some of the actions of the Government in this respect. I was informed some time ago that the armed services are either going to order, or are already ordering, certain equipment containing a percentage of synthetics when previously such equipment was made of pure wool.

The Government is also allowing the importation of synthetic yarns from the United States and elsewhere which sell here in active competition with wool. I have a letter from the department which shows that although the tariff on nylon fibre is 50 per cent the Government has allowed that synthetic to come into the country under by-law at 7½ per cent. It is doing this while, at the same time, the Americans maintain a duty of 28 cents per lb. on our wool. I think that before the Government decided to allow American synthetics into this country at a reduced rate of tariff under by-law it should have bargained with the Americans to have Australian wool admitted to America without its having to pay the present high duty imposed on it. By reaching such an agreement we could have helped to increase American consumption of our wool because that high duty on Australian wool is one of the greatest impediments to its use in America. The Government has been very lax in not taking stronger action to overcome the problem of the American duty on our wool.

I have spoken of the duty on nylon. The duty on rayon, the other well-known synthetic fibre, is 7½ per cent., but the Government has allowed rayon to come into this country, under by-law, free of duty, which allows it to compete with wool here in Australia on a more favorable basis than would otherwise be possible. So even in our own country the Government is interfering with the sale of wool. It cannot dictate what other countries do with regard to consumption of our wool there, but it has full power over what happens to wool within this country’s borders. I think that the duties on synthetics which come into open competition with wool here should have been maintained.

The Government has in the past taken other similar actions which 1 have mentioned here, which adversely affected the sale of wool.In 1959, I think, it increased from 5¼ per cent, to 8 per cent, the interest rate on overdrafts connected with the sale of wool. That had the immediate effect of interfering with the sale of wool at that time, as well as with the price of wool. I have articles here which appeared in “ Rydge’s Journal “ and the “ Sydney Morning Herald “ pointing out that the action which was taken by the Government at that time had a very detrimental effect on the sale of wool and particularly on the price of wool. At that time,I say, the Government singled wool out when it increased the interest rates on overdrafts, and that had a very bad effect on the wool industry.

Formerly scouring and carbonizing of wool was carried out on a very extensive scale in Australia. Australian industry was working three shifts on this work, and 1 have heard overseas wool buyers say that Australia did one of the best jobs of any country in the world in the carbonizing of wool. I myself took Japanese buyers to see the Secretary of the Department of Primary Industry at that time. The Minister appointed the secretary of his department to meet this delegation, and the buyers asked that a small quota be given to them to bring imports to this country as a sweetener which would facilitate their obtaining finance from the Japanese banking authorities to enable them to continue to buy carbonized wool in Australia. They said that as things stood they could get finance for the purchase of raw wool for treatment in Japan, but could not get finance for the purchase of partly treated wool from Australia. The departmental chief was so impressed that he took the matter up with the Department of Trade, but it refused any concession in this regard. The result is that, whereas formerly the scouring and carbonizing industry was working three shifts, it now finds it difficult to work even one shift a day, because the Japanese who previously imported scoured and carbonized wool from Australia set about taking all their requirements in raw wool. So not only did we lose employment in an important industry, but we also lost income as a result of the failure to take the opportunity which was offering. Not very long after that we made a trade agreement with Japan which allowed many millions of pounds worth of imports to come into this country from Japan. Had some arrangement been made at the time of which I am talking we could have maintained at its then level that very important scouring and carbonizing industry in this country. 1 do not wish to speak at great length on this matter, but I feel that the Government is at fault in some respects in relation to the wool industry. It has not done everything possible to facilitate the marketing of our wool, yet it has done some things which have reacted detrimentally on the wool industry. So I urge the Government to give wool more sympathetic consideration in the future.

I hope that the wool industry itself will embark on a very vigorous campaign for the promotion of the sale of wool, since wool represents one of our greatest industries. The industry has to be developed, and is capable of being developed, and we should concentrate on doing that. As I pointed out earlier, other industries are being bolstered with Government assistance, and the same thing should be done in regard to the promotion of wool. There is a £1 for £1 subsidy on research to find new uses for wool, and a similar subsidy could be given in relation to a scheme of the kind we are now discussing, because the nation as a whole will benefit from the work carried out.

Mr KELLY:
Wakefield

.- I am under some pressure this afternoon because we all want to hear the honorable member for Wannon (Mr. Malcolm Fraser) speak on this subject. He always makes a valuable contribution to debates on wool. So I intend to be brief and will confine myself therefore to the subject matter of the bill. If I do that, I think I will be unique in some respects.

The promotion scheme which is now coming to fruition is, to my mind, the direct result of the coming together of the two organizations which, as honorable members know, have operated in opposite directions on many occasions. The whole community welcomes the agreement of these organizations and the scheme they have formulated. The chief credit, to my mind, should go to three people - Sir William Gunn, Mr. Scott of the Australian Woolgrowers and Graziers Council and Mr. Heaslip of the Australian Wool and Meat Producers Federation. It is to the great credit of those three men in particular that they were able to overcome the prejudices of the past, leave the battleground behind, and bring the two organizations together for the benefit of the industry.

In February last I had an opportunity to see the work of the International Wool Secretariat at first hand. The secretariat is, of course, financed largely from the levy which is the subject of these bills. I went to the secretariat office in London as a critical primary producer who has often wondered how the money that is raised is spent. I saw at first hand the operations of the International Wool Secretariat in London and I came away completely convinced of the value of the work and that there is need for a great deal more work to be done. I recall writing in my personal diary that night an entry to the effect that if any doubting wool-grower had been able to hear what I had heard that day and see what I had seen, there would have been no need for the campaign that Sir William Gunn was forced to wage among wool-growers in order to have the money raised to carry out this promotion.

Mr Duthie:

– Give us the details of what you saw.

Mr KELLY:

– I should like to do so, but I do not want to take up time and thus prevent the honorable member for Wannon from speaking.

Mr Turnbull:

– What about other honorable members? Do you not think about them?

Mr KELLY:

– Indeed I do. After my visit to the International Wool Secretariat I called at the Albert Hall and saw there an exhibition that was put on by the nylon spinners. It demonstrated to me the necessity for the wool industry to raise increased money for promotion. The nylon spinners engaged the Albert Hall for a week, and no money was spared. The nylon spinners pay for the advertising of manufacturers. That is the kind of thing that the wool industry is up against. I am unable to divulge the amounts spent on advertising in the wool industry. 1 have the figures but they are confidential. I can say that the wool-growers provide a certain amount of the money and that the manufacturers subsidize that amount. However, in the nylon industry the spinners pay for the advertising of the people who sell the goods. That is the reason why this increase in the levy for promotion is necessary. No doubt exists as to the quality of the work that is being done, but there is obviously a need to increase it in view of the opposition which the industry is up against.

The last point I wish to make relates to the spending of the money that will be raised. The increased levy will bring in about £2,400,000 or more. That is a considerable amount of money, and it behoves wool-growers to find the best type of people to spend that money for them. Those who have control of the spending of such a considerable sum of money must be people of the highest quality. This is something that worries me. I know that persons who give up their time in the interests of the bureau do so, in most cases, at great sacrifice to themselves. I am not criticizing them, but I do say that, in all instances, the person with the best qualifications are not being nominated for the Wool Bureau. The complex business of wool promotion warrants the engaging of persons with the very best ability.

There has been a tendency to regard posts in the bureau as a prize for past endeavours and as a means of rewarding some one who has given up a lot of his time to the industry. That is not good enough in this situation. The organizations have to make sure that in future they appoint the best possible persons to represent them on the board. I am not saying this in any sense of personal criticism. I quite realize that I get no political points for saying such a thing; but it is important, of this large amount of money is to be wisely spent, that the ablest persons be selected to spend it. The measure of the quality of those persons is not necessarily length of service; qualities of mind and experience should be considered. I have much pleasure in supporting the bill.

Mr DUTHIE:
Wilmot

.- I am sorry that the honorable member for Wakefield (Mr. Kelly) could not have given us a ball-to-ball description of the methods he saw in Great Britain. I was prepared to sacrifice my quarter of an hour this afternoon to give him the extra time had 1 known that he wished to do so. The story of the levy on wool dates back to 1936 when 6d. a bale was levied for promotional purposes on wool produced in Australia. In 1945 the levy was lifted to 2s. a bale. Labour was then in office. In 1952 it was increased to 4s., and in 1960 it was increased to 5s. a bale. The bills now before us propose to lift the levy to 10s. a bale for this year only.

It is expected that the amount to be raised this year will be £2,600,000 sterling. Expectations are that the International Wool Secretariat will require an amount of £5,600,000 by 1966-67. That means, obviously, that a further increase in the levy will have to be made in the interim; and we will have to get the approval of the growers’ organizations for such an increase. The Labour Party fully realizes the necessity for the promotion of Australian wool. It believes that wool is the greatest fibre in the world and that all the wonderful inventions of nylon, acrilan and other fibres will never out-class wool in quality or character. However, there will always be a struggle between wool and these synthetic fibres which, of course, have created a revolution since the war. They are on the warpath, as the honorable member for Wakefield (Mr. Kelly) has just mentioned. They are on the warpath after wool and it is no use the wool industry becoming complacent about this. People will often buy the cheaper article of inferior quality rather than the better but dearer article. The contest with synthetics is an unending one. It is a day and night struggle and it is for this reason that we on this side of the House support this legislation. We feel that it shows evidence of vision and a realization that the enemy, which is the synthetics, is a very powerful one and a very financial one, with scientific and technical backing of a very high degree.

The issue of “ Muster “ of 9th August refers to one field of promotion that the

International Wool Secretariat has neglected. The attention of the secretariat was directed to it in Sydney recently by the president of the Japanese Chamber of Commerce, Mr. Tanabe. He said that Australia should place -greater emphasis on wool promotion in Japan. He said that Japan was Australia’s best customer for wool and was the only country that was increasing its purchases of wool from Australia. He said further that there seemed to be a tendency to place too much emphasis on wool promotion in other countries and to overlook the importance of the Japanese market to the Australian wool-growers. He warned us that synthetic fibres were advancing rapidly in Japan and were becoming lower in price, and he said that for this reason alone the Japanese market for our wool should be stimulated.

The article in “ Muster “ also states -

Sir William Gunn said that the International Wool Secretariat appreciated the importance of the Japanese market. “The I.W.S. handles wool promotion in Japan and Australia as a member nation relies on this body for promotion overseas “.

Then he said, and I think it is good news - “Within three weeks of the new I.W.A. managing director, Mr. W. J. Vines, taking up his position, he and I will personally visit Japan for an extended period to survey the situation. “ At the moment the I.W.A. is spending a greater percentage of its funds in that area than ever before “, Sir William said, “ and we intend to extend our activities considerably in the very near future”.

Just because a nation is buying a lot of our wool we must not assume that we need no promotion there. It is a good point that the president of the Japanese Chamber of Commerce has emphasized and I am glad to know that Sir William Gunn is to go to Japan soon to conduct a searching and extensive wool promotion campaign in that country, because the use of synthetics is growing rapidly there.

Agreement to this levy of 10s. per bale was not reached without a bitter fight. We have the result in the peaceful atmosphere in this Parliament to-day, but the atmosphere was not peaceful in parts of the country during Sir William Gunn’s campaign to get unanimity between the wool-growers’ organizations. He did a power of talking and he is a mighty good salesman. He was speaking with hard-headed wool men and to his credit he put the story over sufficiently well and with sufficient tact to convince these men that the 5s. increase was justified.

In the Federal Graziers Council, which is made up of the big wool-growers of Australia - you would call them the autocracy of the wool industry - they were solidly behind the proposal. Sir William did not have much trouble in convincing them. But when he got down to the grass roots - the Wool and Meat Producers’ Federation - he found the going much tougher, as the honorable member for Wannon (Mr. Malcolm Fraser) could tell us, from his knowledge of the position in his own town, Hamilton, in the Wes.ern District, and as mentioned by the honorable member for Lalor (Mr. Pollard) who led the debate for us this afternoon. There on the deciding vote of the chairman, it was decided to agree to the imposition of the increased levy for one year. Many of the smaller men felt that the move to increase the levy was a cover-up move to drown the marketing plan which is now being investigated by the Wool Inquiry Commission.

At all events, we on this side of the House felt we should come down on the side of the proposal and support the increase. After all, it is the growers who have made the decision and no money from the Commonwealth Treasury is involved. When the growers, by a majority vote, decided on this increase, we felt it was right and proper that we should support the legislation. But we do appreciate some of the arguments of the men who disagreed with the proposal, and there were, and are plenty of them. We only hope their fears will not be realized and that Sir William and his team will spend this money wisely. We hope they will spend it not in just tripping around the world on very interesting world trips, but on getting right down to tin-tacks in promotion and using every modern method of promotion such as television and some of the prettier models that Australia can produce. I have seen some of them on television and they are very beautiful, and when they are wearing woollen frocks instead of frocks made from synthetics they look even better. If the Wool Promotion Committee can put on in other countries the sort of show I have seen on television - 1 have not a set but I see other people’s sets occasionally - depicting the attractive colourings of the fabrics and the new modern styling of woollen frocks, 1 do not think we will have any need to fear competition from cotton or half-woollen and half-cotton frocks and other materials. The display put on by the Wool Promotion Committee that I saw was magnificent. If it can be repeated throughout the world I feel that the young women of other lands will be walking around in Australian woollen frocks before many years pass. The display shows the advantage of advertising, if properly done, in wool promotion. I hope the Wool Promotion Committee will spend this money in the best possible way to outdo, out-think and out-gun the synthetics people.

I want now to mention some figures to emphasize the importance of this industry to Australia, and I will quote brieflly from page 969 of the Commonwealth “ Year Book”, 1960, which is the latest one to be published. It says -

In 1958-59 Australia produced 30 per cent, of the world total of all types of wool, the share of all British Commonwealth countries combined representing approximately 50 per cent. The principal wool-growers, other than Australia, are New Zealand with 10 per cent, of the world total, Argentina, 8 per cent., United States of America, 6 per cent., and Union of South Africa, 6 per cent. Production in the U.S.S.R., China, and Eastern European countries together amounted to 18 per cent.-

That was a 2 per cent, increase on the 1954 figures -

World production of wool (all types) in 1958-59 exceeded the average for 1934-38 by approximately 1,500 million lb. or 40 per cent.

At page 973 of the “Year Book”, in a reference to exports of wool from Australia, we find that Japan has figured very prominently. We read -

Of the total shipments in 1958-59, 26 per cent, went to the United Kingdom, 23 per cent, to Japan, 13 per cent, to France, 10 per cent, to Italy and 9 per cent, to Belgium-Luxembourg.

I have here the figures in relation to a few of the countries which take our wool, showing the increase of exports since the average for 1934 to 1939.

From 1934 to 1939 exports of wool to the United Kingdom averaged, in round figures, 288,000,000 lb. In 1958-59 the quantity exported was 305,000,000 lb. That represents a very poor increase for a period of twenty years. If honorable members read the figures in the Commonwealth “Year Book “ they will note that the quantities exported to Britain during the last few years have moved up and down and that the overall increase has been very small in comparison with that pertaining to other countries. In the period before the war the average quantity exported to Belgium was 107,000,000 lb.; last year it was 103,000,000 lb. Belgium is the only country in relation to which there has been a decrease. Exports to France rose from 100,000,000 lb. to 157,000,000 lb.; to Japan from 131,000,000 lb. to 273,000,000 lb.; to Italy from 21,000,000 ib. to 113,000,000 lb.; and to Germany from 36,000,000 lb. to 60,000,000 lb. Exports to the United States of America rose from 25,000,000 lb. to only 28,000,000 lb. - an increase of 3,000,000 lb. in twenty years, which is insignificant. Other foreign countries took 48,000,000 lb. of wool annually before the war but are now taking 134,000,000 lb.

The average annual production of greasy wool in Australia between 1934 and 1939 was 888,677,000 lb. By last year production had risen to 1,456,759,000 lb. - a considerable increase over that period of twenty years. The sheep population is a very important aspect of this matter. The average sheep population in Australia from 1934 to 1939 was 111,319,000. By last year it had risen to 152,685,000 - an increase of 41,000,000 in twenty years. Those figures prove the soundness and the importance of this industry, which provides 40 per cent, of our total export income.

I refer now to the price factor. In 1954- 55 the value of wool exports from Australia, in round figures, was £353,000,000. In the following year it fell to £337,000,000. Then it rose in the next year to £483,000,000 but fell to £373,000,000 in 1957-58 and to £302,000,000 in 1958-59, which was the lowest figure for about ten years. The “ Year Book “ for 1960 mentions this interesting point -

With the return to auction sales since 1945-46, the average price of greasy wool sold rose rapidly from the contract price of 15.45d. per lb. applicable in 1945-46 to the unprecedented level of 144.19d per lb. in 1950-51.

It will be remembered that that was the boom year. The relevant passage continues -

This was followed by a sharp fall and prices, in the years 1951-52 to 1957-58, fluctuated in the range 61d. to 82d. while in 1958-59 they fell to 48.6d., the lowest for ten years.

So the wool industry is having its ups and downs in relation to prices. That brings us back to the point mentioned by the honorable member for Lalor - that the Australian Labour Party is firmly of the opinion that we should have a stabilized marketing plan for the wool industry. We cannot afford to have these vicious fluctuations in an industry which is so important to the Australian economy and to 120,000 woolgrowers.

Tasmania is only a little island, but it has a tremendous wool industry, as is indicated by the figures which I am about to cite. The total quantity of wool produced in Tasmania in 1943-44 was 17,924,000 lb. Production rose in the succeeding seventeen years up to 1959-60, when 33,565,000 lb. was produced. In other words, Tasmania almost doubled her wool production in seventeen years. The value of that production rose from £1,437,000 to £8,254,000. We are very proud of our wool industry. The future in Tasmania is assured. The number of men producing champion stock has increased. The amount spent on research and on obtaining and breeding better stock is fabulous when compared with that spent by some of the producers on the mainland.

Opposition members agree with the measure before the House. We believe it is timely. I again say that we cannot afford to reduce the amount spent on wool promotion; we may even have to increase it because, as I indicated earlier, the contest with synthetics is going on day and night. The wool industry, in order to beat that competition, will have to continue day and night promoting the sale of its products. We have a wonderful industry, but in order to preserve it we must retain our markets and keep our promotion at full pressure.

Mr ANDERSON:
Hume

.- As a wool-grower, I am very pleased indeed to support this legislation. To my mind, the wool-growers have been concentrating too much, as is evident in the speeches that have been delivered to-day, on costs and marketing. In my opinion, the real problem is that of promotion. It has been stated in this chamber that synthetics constitute a great competitor to the wool industry. I do not think that is so. I believe that cotton is the greatest competitor to wool and that the way to overcome that competition is to promote further the use of wool. I recognize that there has been a great diversity of opinion about the value of increased promotion, but the industry has delayed its decision on this matter for too long. Because wool is sold - it has been sold for 3,000 years - people are inclined to think that it sells itself. That is not so. The fact that the wool industry has lagged in promoting the sale of its product has allowed the human desire for novelty to creep in and has enabled synthetics to gain a big share of the market. To suggest that we sell all our wool and that therefore there is no need to promote the use of wool is, to my mind, complete folly. The honorable member for Farrer (Mr. Fairbairn) answered that point very well.

The sale of wool depends on the law of supply and demand in the same way as does the sale of every other commodity. The law of supply and demand will determine whether wool is sold at a good price or at a poor price. In my opinion, the way in which to improve the sale of wool is to increase the demand for that product. If we increase the demand, we will find that the price will rise. But wool promotion does not simply mean advertising wool. It means a great deal more than that; it means encouraging new uses of wool and presenting it to the consumer in new forms such as wash-and-wear garments. Wool can be converted into magnificent fabrics. We, living in a wool-growing country, know these things. But a great proportion of the consumer world which can afford to buy wool is completely ignorant of the qualities of wool. It knows the reputed qualities of synthetics and cottons because it is told about them continually in powerful promotion campaigns for those commodities. But wool has always been a Cinderella in promotion schemes; for 3,000 years wool has been sold and wool still should be bought, in the opinion of those who control it. So this levy, to my mind, is a very necessary step.

The question that is arising among a number of growers of my acquaintance is whether the levy should be on the basis of so much a bale or on a percentage basis. The levy on a bale is to the advantage of those who grow merino wool. The price of merino wool is higher than the price of cross-bred and a levy on a bale would take a small proportion of the gross returns of merino wool-growers. I think that an examination should be made of the rival methods of collecting the levy, but in this instance, because the available time is so short, we will have to adopt a levy of Ss. a bale. Another problem, of course, is that a proportion of the wool clip is sent overseas to be sold on overseas markets. If we were to revert to the percentage basis for the collection of a levy a good deal of negotiation or examination would be required in order to determine what amount should be paid by growers whose wool had been sold on the London market. For this year, I think we have to accept a levy of so much a bale.

The honorable member for Darling (Mr. Clark), in a quite well-reasoned speech, mentioned that imports of nylon into Australia had been allowed under by-law, attracting a duty of 74 per cent, instead of the usual SO per cent. I cannot believe that the criticism of that action is soundly based. It may be that the material allowed in under the by-law provisions was needed for manufacturing purposes. For instance, nylon cord plays a very important part in the manufacture of motor tires. If such importations would reduce the cost of our tires and increase employment in the tire industry, surely there is ground for allowing the importation of nylon for that purpose. I am quite certain that no synthetic has been allowed to come into this country under bylaw to compete with wool.

Shortly, we hope to get the results of a wool inquiry. I believe that the unfortunate delay in implementing this levy has been brought about largely by the fact that there is an expert body examining the whole of the wool industry. I am glad that the organizations concerned have finally agreed to implement the levy at once. We are looking forward to obtaining a considerable amount of information from this wool inquiry because included in its terms of reference is an examination of wool promotion and wool marketing. I sincerely hope that the findings of the inquiry will include some reasons why there is such a vast discrepancy between the price of the raw material, wool, and the price of the finished articles such as suits or ladies’ garments. I feel that the money for wool sales promotion will be well spent and I am quite convinced that, in time, it will reflect itself in an improved market price for wool.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I would like to thank previous speakers in this debate who have cut short their time quite considerably in order to make it possible for one or two of us to rise at the tail end of the debate and to speak shortly. I would like to comment on one point mentioned by the honorable member for Lalor (Mr. Pollard). The honorable member said that a wool inquiry was not necessary because all the evidence that was needed for any decision was already available inside Australia. Even if that is so, it does not make the inquiry unnecessary because the reason for the inquiry arises from the fact that the growers’ organizations could not agree on policy in regard to this matter. The growers’ organizations jointly asked the Government to appoint an inquiry to resolve the doubts of the organizations and the differences between them. Therefore, even if the knowledge is available inside Australia, the growers wanted the inquiry on the ground that it was necessary to resolve their differences.

I am very glad to note that every person who has spoken this afternoon has supported this increased levy for wool promotion. As the honorable member for Lalor mentioned, even though, on a national level, this is not a controversial measure, on a State basis - in two States - it most certainly is a controversial measure. Broadly speaking, on the national level, the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation have both supported this proposal. But although the graziers, in total, have supported the measure, two constituent bodies of the Australian Wool and Meat Producers Federation - the Victorian branch and the Western Australian branch - have vigorously opposed any increase in the levy until after the wool inquiry report is available. It is only because of the casting vote of Mr. Heaslip, the president of the Australian Wool and Meat Producers Federation, that we have this legislation before us to-day and that this levy is being introduced.

I should like to refer briefly to the reasons for the levy and to the arguments of those who speak against it. I understand that the increased levy is needed at this time so that the planning of world-wide promotion can begin on an adequate basis and can follow the sort of guinea pig arrangement that has been tried out in Australia over the last couple of years. It takes, probably, a year’s planning before any new or vigorous promotion scheme can be put into effect. If the increased levy had not been brought forward now, that would have delayed planning for a year. That, in turn, would have delayed action for two or even three years from now. The increased levy was necessary to make it possible to appoint a chairman of the International Wool Secretariat and to appoint appropriate staff at key points throughout the world.

There is also a very real need for the levy in order to persuade manufacturers to use wool, because many of them have been persuaded at one time or another to use synthetics. The honorable member for Wakefield (Mr. Kelly) drew our attention to the fact that many manufacturers have certain promotional costs paid for them by the base manufacturers of synthetics, but this is not the case so far as wool is concerned. The International Wool Secretariat needs considerable funds to compete with the synthetics people in this regard. 1 think I understand the arguments of those who argue against the levy, even though I do not agree with them. Those people in my area who oppose the levy know my views on it quite well. Those who argue against the levy argue that increased promotion will not affect the price of wool. This cannot be decided one way or another. Increased promotion leading to increased demand may lead to a rise in prices, but that cannot he directly demonstrated one way or another. Therefore, I do not think that that is an argument for or against the levy.

It is also said that additional promotion is useless without some sort of controlled marketing. No matter under what system we market wool, adequate promotion to compete with synthetics is necessary. There is no doubt that the best marketing system will gain greater advantages from good promotion than will a bad marketing system. But no matter how wool is marketed, promotion will be necessary. The people who argue against the levy have also said that an increased levy at this stage may well make it harder to get a levy to support a floor price scheme. This is presupposing the result of the inquiry. Although that proposition has been argued with some force by representatives in Victoria, I do not think there can be any useful comment on it at the present time.

The honorable member for Farrer (Mr. Fairbairn) dealt with the argument that all the wool produced is used and therefore there is no need to promote its sale. Certainly it is all used, but it is often sold at a price which is not economic to the woolgrower. If good promotion can make a contribution to raising price levels, as I believe it can, it should certainly be supported. 1 would like to ask those who oppose this levy to remember that the matter will be reconsidered in March, 1962. Unless there is a new agreement between the organizations, and unless new legislation is introduced before the end of June next year, this matter automatically will lapse and the old rate of levy will prevail. The Australian Wool and Meat Producers Federation is in a position to examine this matter very fully in the light of the report following the inquiry into the wool industry. An element of compromise has been introduced and the federal president of the federation, Mr. Heaslip, probably had that in mind when he tipped the balance and used his casting vote. He has adopted that policy in a spirit of compromise in order to enable the organizations to work together for the good of Australia’s most important industry.

One other matter that I would like to mention at this stage is the fact that growers and many other people are eagerly awaiting the report of the Wool Marketing Committee of Inquiry. They deeply regret that the report has not been made public before now. However, the presidents of each organization have said that they do not expect the report to be issued before December at the earliest.

I would like to say a few words about the way in which wool is marketed at present. In my opinion three inhibiting factors are lowering the price of wool below what it would be under different marketing arrangements. Those three factors operate at all times other than when the demand for wool is very keen. The first factor is the unstable price received for wool. This gives the manufacturer the fear that his competitor may buy wool a month later at a lower price. Forward selling on behalf of buyers is the second factor that tends to reduce the immediate price of wool. It is in the interests of the buyer to purchase wool at the cheapest price in order to cover his forward sales, the third factor is the competition that exists between buyers. If a manufacturer finds that a buyer has quoted a certain price for a particular type of wool and that his competitor has been supplied by another buyer with the same type of wool, but at a cheaper price, that manufacturer will change his agents. He will go to a different buyer - one who buys at the cheapest price. This competition between buyers is in itself an inhibiting factor on the price of wool to-day, even though buyers claim that they work on a commission basis and therefore like to see high prices.

Mr Stewart:

– You people do not believe in competition when you are selling wool.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I do not think that is a sensible statement. I had hoped that over the last year or two a more realistic attitude would have been adopted by our research organizations in relation to what I believe to be a most important element of promotion. Despite the magnificent work done by Sir William Gunn on behalf of the Australian Wool Bureau, only recently statements were made by the Commonwealth Scientific and Industrial Research Organization and leading spokesmen for the Australian Wool Bureau indicating that in their opinion research organizations should never carry out research into blends of any kind and should never promote fabrics that are composed of a blend of any kind. In other words, we do promotion and research work only in respect of fabrics that are composed of 100 per cent. wool. That policy may have been satisfactory when we were promoting the sale of wool as wool and not the end product, but most people now seem to agree that it is not good enough simply to say that wool is wonderful. We should promote the sale of the end product - the trousers, the suit, the socks, or the ties which the honorable member for Lalor (Mr. Pollard) said were not available. We should promote the sale of the article that the people want. At present the use of a great many articles whose production benefits the wool-growers of this country cannot be promoted by the Australian Wool Bureau because they contain a small amountof synthetics. Many examples could be given, the present policy of doing research into and promoting the use only of fabrics made of100 per cent wool unduly restricts both the Australian Wool Bureau and the C.S.I.R.O.

There are four reasons why I think this policy should be changed. The first is that traditional markets will be lost unless the policy is changed. In some cases articles made entirely of wool do not wear as well as articles made of a blend of wool and a small amount of synthetic material. In some cases the allwoollen article is not as suitable and is inferior to the blended article. Consider socks for example. The policy adopted by the Australian Wool Bureau and the C.S.I. R.O. is that no research can be done into material used for the manufacture of socks unless that material is 100 per centwool. If that view is maintained this market will be lost to wool. My second reason for stating that the policy must be changed is that a blend of a small quantity of synthetics - 8 per cent to 15 per cent. - has been found by many of our manufacturers to give a better material for the Australian consumer. Accordingly manufacturers use materials containing a small amount of synthetics. One of the largest trouser manufacturers in Australia - the Fletcher Jones concern - whose factory is in my electorate, has found that a blend of 15 per cent of nylon or terylene increases the wearing properties of the garment considerably. Therefore Fletcher Jones uses a small amount of synthetics in its garments, but in the eyes of the Australian Wool Bureau those articles do not qualify for promotion because they are not 100 per cent. wool. My third reason for contending that the policy must be changed is that material containing a blend of wool and synthetics would open up new markets for wool that do not exist to-day. As an example, consider the effect of the introduction some time ago of wool-terylene ladies’ summer skirts. Wool had never been used in summer skirts for women up to three or four years ago but the blending of wool with terylene meant that a large quantity of wool was sold in a completely new market. I believe that it is within the scope of our research departments to devise a wool and synthetic blend, or wool and cotton blend if you like, that would be suitable for use in the tropics. That would open up the largest of all markets - a market that is not at the moment available for wool in any form at all. In this connexion it is worth noting that the honorable member for Hume (Mr. Anderson) said that he thought cotton and not synthetics was the largest competitor of wool. If a material comprising only 30 per cent, or 40 per cent, of wool could be found suitable for the tropics it would mean the opening up of perhaps the largest market in the world for wool - a market which at present is completely denied to the wool-grower. Fourthly, I think that a change in the present policy would result in the use of more wool. Imperial Chemical Industries of Australia and New Zealand Limited, which markets terylene, has a rule whereby it restricts promotional support to materials containing at least 55 per cent, terylene. A material containing 40 per cent, or 50 per cent, terylene does not qualify for promotional assistance. Therefore, if a manufacturer proposes to use terylene in a blended material he will use 55 per cent, terylene, even though the best article may be one comprising 20 per cent, terylene and 80 per cent. wool. Manufacturers know that if their article is not 100 per cent, wool they cannot qualify for assistance from the Australian Wool Bureau and accordingly they tend to use at least 55 per cent, terylene in order to qualify for promotional assistance from Imperial Chemical Industries. If the Australian Wool Bureau were to change its policy many manufacturers would reduce the percentage of terylene used and increase the percentage of wool. In saying all this I do not suggest that the use of each and every blend should be promoted. Each type of garment would have to be judged on its merits having regard to the purposes for which it is intended to be used. The present policy pursued by the Australian Wool Bureau and the C.S.I.R.O. denies great benefits to the Australian wool industry and does, I believe, a great disservice to wool-growers. This policy should be changed.

Mr FORBES:
Barker

.- I support the bill. I will be brief in my remarks because of the spirit in which this debate has been undertaken this afternoon and because I wish to give my friend the honorable member for Mallee (Mr. Turnbull) an opportunity to speak before the debate ends. I would like to pay a tribute to the two wool-grower organizations which have shown a spirit of co-operation. If that co-operation is continued it augurs well for the future of the industry. We must all admire the way in which some members, particularly of the Australian Wool and Meat Producers Federation, have departed from deeply and sincerely held views over a very long period in order to bring the two parts of the industry together. Whatever we may think about the validity of those views, there is no doubt they are deeply and sincerely held, and the fact that these two organizations are prepared to cooperate in order to advance the industry is a great tribute to them. For that attitude, they are deserving of the commendation of the House.

I have no doubt that increased wool promotion throughout the world will increase the demand for wool. Some growers - I hope not too many - may have the mistaken impression that wool promotion consists only of newspaper advertisements and so on. Although this type of promotion is important, I believe that by far the more important type of wool promotion is that conducted on the technical side. We know, for instance, that processes such as SiRoSet were accepted by the manufacturers only after a great deal of push and very active promotion on the part of somebody. It was only after the Australian Wool Bureau appointed technical officers to act as go-betweens and explain the various processes to the manufacturers that these processes were adopted on a large scale. Any honorable member who has not done so would get a great deal of enlightenment from reading the annual report of the Australian Wool Bureau which was tabled by the Minister in charge of the Commonwealth Scientific and Industrial Research Organization (Dr. Donald Cameron) yesterday. Over about four or five pages of that report we find listed all the promotional activities undertaken in Australia by the bureau. Those activities are of a very wide and complex nature. We know also that last year, as a result of those activities, wool usage in Australia increased by something between 25 per cent, and 28 per cent. We now have to consider whether by an active wool promotion campaign overseas, where 95 per cent, of the Australian wool clip is used, wool usage can be increased. I feel that with an active campaign overseas there would be no limit to the demand for wool and no limit to the point to which prices for wool would rise. An increase in the use of wool overseas is one of the objectives the International Wool Secretariat has in mind in providing additional funds for carrying out the sort of activities for which the Australian market has been the laboratory, as it were, for the rest of the world.

Before resuming my seat I should like to emphasize a point that I have raised on previous occasions. I have always believed that not only the wool-growers themselves but also this Government should take an active part both in the provision of funds and in the use of facilities in wool promotion on the technical side. Wool is vital to the future development of Australia. It is becoming increasingly apparent that the level of overseas earnings flowing into Australia will establish the ceiling of our development; we shall be able to develop only to the extent that our export income increases. It is also evident that with the growing uncertainty of overseas markets for our foodstuffs caused by the formation of the European Common Market and other agricultural protectionist organizations all over the world, the part that wool will play in earning export income will become increasingly important. That being so, the sale of wool at satisfactory prices on overseas markets is a project into which the whole nation should throw its weight through the Commonwealth Government. Therefore, I believe that the provision of adequate finance and all possible technical facilities is a national responsibility. In other words, the Commonwealth Government should contribute to an international wool-promotion campaign and should make available the resources of the Department of Trade which have been so successful in other fields.

I know full well that the reason why this has not been done in the past has been that the two principal wool-growers’ organizations have always opposed Government participation. Because of this opposition, the Government has concentrated on providing money for research which has proved of inestimable value to the industry in many ways. The main reason why the growers’ organizations have opposed government participation was that they felt that government participation would mean loss of independence to them. I also know from speaking to many wool-growers throughout Australia that if these organizations continue to adopt that attitude they would lose the support of the majority of their members. The growth of the research organizations sponsored by this Government has proved conclusively that it is possible to establish a fruitful partnership between the Government and the growers without loss of independence to the growers. 1 see no reason why similar results cannot be achieved in connexion with wool promotion, especially if the Government’s contribution were in the direction of supplementing the contribution mad’e by the growers and the Government mobilized its facilities in supplementing the efforts of growers in overseas wool promotion. It is my firm belief that sooner, rather than later, this support by the Government will become essential to our national development; and I hope that in the very near future the growers’ organizations will ask the Government to work with them in this direction. If they do, then I sincerely hope that for the good of this country the Government will participate in that way. I support the bill.

Mr TURNBULL:
Mallee

.- I am very appreciative of the fact that honorable members who have spoken before me have cut their time short to give me the opportunity to speak on this bill. I do not propose to speak for long because I know that the Minister for Primary Industry (Mr. Adermann) is anxious to have the bill receive the royal assent at the earliest possible date so that its provisions may be put into operation speedily.

First let me say that wool promotion is absolutely essential. It is my firm belief that the main factor in selling stock, wool, or anything else is a buoyant demand; and I fail to see ‘how a reserve price within the auction system can have much to do with wool promotion. The end result of having a reserve price within the auction system is that perhaps it could be the means of averting calamity should prices drop below a certain level, or to a point below the actual value of the wool being sold. If it is considered that a floor price is necessary, then let us have it by all means; but it must be remembered that the committee which would be set up to buy the wool also has to sell it. If the reserve price was high enough and was really the price at which the wool is finally sold, that might be quite all right, but as the wool has to be sold again, it is essential that there be a buoyant demand for it. lt has been said that all our wool is sold each year, so we do not need promotion. Let me illustrate the point I wish to make by quoting an example which I gave to the House on a previous occasion. Let us suppose that certain blocks of land were to be offered for sale in Canberra and they were not advertised. It is certain that some one, somehow, would learn of the proposed sale and would attend. It is equally certain that all the land offered would be sold, but only at a certain price. If the land was well advertised throughout Canberra and further afield it would probably bring hundreds of pounds per block more than it would bring without advertisement. After all, promotion is just advertising. We must have promotion if we want a buoyant market. The same applies in the sheep market. When the demand is buoyant the price is high, but when the demand is slack prices fall. The only way in which a buoyant demand for wool can be created is by people throughout the world getting to know the quality of wool and their need to have it for clothing and other purposes.

I regard promotion as a business proposition and nothing else. I have worked out some figures very roughly. The average weight of a hale of wool is, say, 300 lb. The bill seeks to increase the promotion levy by 5s. a bale. If the increased promotion that will come from the 5s. increase in the levy increases the price of wool by one farthing per lb. it will increase the profit of the wool-grower by ls. 3d. a bale. When the additional 5s. a bale, for which this bill provides, is paid by wool-growers all over

Australia a vast amount will be available for wool promotion. Considering all the articles that are sold in Australia and elsewhere at high prices through promotion, we must realize that adequate promotion of wool could mean millions of pounds more to growers.

Some people are saying that we have had a promotion levy of 5s. a bale in the past and the price of wool has fallen. However, the question is this: Would the price of wool have fallen to a greater extent if there had not been that promotion? The price might have fallen by a greater amount without that promotion.

Therefore, I am most anxious to support this bill to the very best of my ability. Wool is Australia’s greatest export income-earner. Every one knows that the more money we can obtain for our wool, the greater chance we have of overcoming our balance of payments difficulties. That is only fundamental. With some reservation, it is my opinion that people other than the wool-growers - I do not mean the Government: I mean people in secondary industry in Australia - should contribute to this promotion for the simple reason that secondary industry in Australia can continue to operate only if we build up our overseas balances to such an extent that raw materials for those secondary industries can be freely purchased and imported to enable them to continue satisfactorily.

Mr Makin:

– Would you be in agreement with some degree of manufacture - for instance, the manufacture of wool tops - in Australia?

Mr TURNBULL:

– Yes, I am quite in agreement with manufacturing in Australia, but I also believe that we cannot always sell and never buy. We need to have reciprocal trade. Very shortly we will have much talk about the European Common Market and all these matters will come into that discussion. I do not want to deal with that now. I certainly believe that we must manufacture as many articles as possible in Australia. However, I believe there is a limit to that because we must bring in from overseas the raw materials for our secondary industries. Unless we are able to sell our products overseas we just cannot import, because we cannot keep on borrowing money overseas to import goods for our secondary industries. Year after year since

I have been in this Parliament I have found that members are becoming more conscious of the value of primary production in this regard.

I appreciate having this opportunity to say those few words. I understand that the Minister will now take the bill through the remaining stages. I wish it every success. The bill provides for the increase of levy to operate from 28th August to 30th June next. This legislation will then cease to exist on the statute-book and fresh legislation will be needed to continue the increase if that is desired. Therefore, people will not be able to say that once this legislation is placed on the statute-book we will never get rid of it. The operation of the increased levy will continue only if further legislation is passed because the purposes for which the levy was originally imposed are being served.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 134

WOOL TAX BILL (No. 1) 1961

Second Reading

Consideration resumed from 15th August (vide page 19), on motion by Mr. Adermann -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 134

WOOL TAX BILL (No. 2) 1961

Second Reading

Consideration resumed from 15th August (vide page 19), on motion by Mr. Adermann -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

Sitting suspended from 5.55 to 8 p.m.

page 134

QUESTION

AUSTRALIA AND THE EUROPEAN COMMON MARKET

Mr MENZIES:
Prime Minister and Minister for External Affairs · Kooyong · LP

– by leave - The decision of the Government of Great Britain to negotiate for admission to the European Economic Community is one of enormous political, economic and historic importance for Great Britain herself, for Europe, for the Commonwealth in general and Australia in particular, and for the world. It is, therefore, essential that, at this first opportunity after the visit of the Secretary of State for Commonwealth Relations, Mr. Duncan Sandys, and after Mr. Macmillan’s announcement in the House of Commons, I should, on behalf of the Australian Government, set out in this Parliament the nature of the action proposed or taken, and of the issues involved. But before I do that, there are some matters of history to be recorded.

Not long after the Second World War, movements began for strengthening Western Europe, economically and politically, against new threats to freedom and progress. These took a particular practical form when, in 1950, the European Coal and Steel Community was promoted by M. Schuman, of France. This was a marked success, and paved the way for the later development of the Common Market.

In 1957, the Atomic Energy Community, known as Euratom, was set up. Concurrently, on 25th March, 1957, the Treaty of Rome was signed, establishing the European Economic Community, sometimes known as the Common Market or The Six. The parties to the Treaty were France, Germany, Italy, Belgium, the Netherlands and Luxembourg. While this treaty was being negotiated, Great Britain made her first decision, which was not to participate. At that time, she felt that, although she approved of the idea of European unity, she could not go in as a party because of her Commonwealth commitments, her own system of protecting British agriculture and, as I have always supposed, because she did not choose to accept any abatement of her own sovereignty.

But she still took active steps. Her second decision was to propose an industrial free trade area for the whole of Western Europe, including The Six. This proposal would have met the agricultural and, for the greater part, the Commonwealth considerations which had previously deterred her. But The Six did not favour the proposals, and they failed.

A third decision was then taken. Great Britain formed the European Free Trade Association with Sweden, Norway, Denmark, Austria, Portugal and Switzerland. This group became known, and I shall refer to it, as The Seven. Subsequently, attempts were made to bring about an association between The Seven and The Six but without success,

I mention these matters of history because they will remind us that the decision now taken is the fourth, and that as it involves detailed negotiations with The Six on items, some of which concern Australia very greatly, we have now reached a period in which we must all clarify our attitudes on identifiable matters of great practical moment. lt is now necessary to turn to the Treaty of Rome itself to discover the broad structure and mutual obligations of the economic community which Great Britain will now negotiate to enter. The preamble to the treaty stated that the signatories were “ determined to establish the foundations of an ever-closer union among European peoples”. Under the treaty, the Common Market will be progressively established during a transitional period of somewhere between ten and fifteen years.

This involves the progressive elimination of customs duties and quantitative restrictions on trade between member States, and the establishment of a common external tariff. There is to be a common agricultural policy, providing for such matters as increased production and organized marketing. Subject to the negotiations, which will be put in hand, probably by about October, 1961, The Six were due to meet before the end of this year to work out the agricultural policy. This is clearly one reason for the decision by Great Britain at this time. She will, having regard to the Commonwealth position, need to negotiate on agricultural matters before the final policy of The Six has been settled.

There is to be free movement of workers between the member states. Nationals may freely, whether individuals or companies, establish themselves in the territory of another member state. There are to be set up common provisions for conditions of trade within the Common Market, coordination of economic policies, and the harmonization of social policies. One of the express purposes of Article 118 is to promote close collaboration between member states in the social field, particularly in employment, labour legislation and working conditions, training and social security.

The treaty further provides for the establishment of a European Investment Bank. Institutions are provided for: An assembly of 142, a council of six, an executive commission of nine, and a court of justice to deal with the interpretation and enforcement of the treaty.

Under Article 237, any European nation may apply for full membership, in which case the agreement must be made by the unanimous act of the existing members - at present The Six. Under Article 238, a nation may become an associate member, as Greece recently has but it is understood that such a course is not favoured in the case of a substantially developed manufacturing nation.

The treaty is, by Article 240, concluded “ for an unlimited period “. There is no provision for withdrawal at the option of the member concerned. It would, therefore, appear that a member can withdraw only with the consent of all the others, the decision being in effect an amendment to the treaty.

Any amendments to the treaty will require ratification by all member States. Clearly, this is a formidable and far-reaching organism, of profound economic significance, and with political objectives to which I shall refer later. I will first endeavour, with as much brevity as possible, to explain the nature of the economic interests involved in a negotiation by Great Britain for membership.

Great Britain herself has, of course, enormous interests at stake. Her decision to negotiate could not have been easy, and we may be sure that it has been arrived at in the light of her immense experience and ripe judgment. It would not be for us to substitute some opinion of our own, even if we had formed one. For we are in no position to assess the elements in the British economy, or the economic arguments this way and that concerning the effect upon her of an achieved membership. We have, of course, a lively interest in the accuracy of her final decision, for we want to see a powerful and prosperous Great Britain, for the good of Australia in all aspects of our national and international life and for the good of the whole free world.

She herself, as Mr. Sandys was careful to explain to us in the course of our frank and helpful exchanges, is impressed by the competitive advantages for her own exports and necessary trade balances which she believes would derive from free access to a home market of over 250,000,000 people. This is a larger population than that of the United States of America, whose own large internal free trade home market with free access to enormous supplies of power and materials has given her great strength in the markets of the world.

On the other hand, of course, Great Britain’s entry into a European free trade area will mean that her own industries will meet the full blast of European competition, including that from countries like Germany which has a longer working week, a less extensive system of social services, and a high proportion of modern plant erected since the war-time destruction. It is said that such competition will lead to greater efficiency, and no doubt, given sufficient time, it will. In any case this aspect of the matter has beyond question been fully weighed and considered.

We ourselves see great scope for an increase, by increased efficiency, in the Commonwealth market. Commonwealth countries to-day take 42 per cent, of British exports, while The Six take 14.5 per cent. - one-third of the percentage. While Great Britain clearly hopes that, as a member of the Common Market, she will increase her exports to Europe - which would be a great thing for her economy - we simply direct attention to the undoubted fact that her Commonwealth market must continue and grow if her overall strength is to increase. But the Commonwealth market cannot grow if any conditions of European membership inflict material damage upon the export earnings of Commonwealth countries. That, of course, is the great matter to which we will direct a close and studied attention before and during the negotiations, until the final decision is taken.

There is another aspect of this great matter. We have throughout felt that the Common Market, as it now stands, whatever effect it might have on any individual country - I have been talking about Great Britain - would tend to increase the total prosperity and purchasing power of The Six, and that Australia, among others, might hope to find a growing market in Europe. As I will show later, we have for some time been actively seeking to develop that market. Undoubtedly, the European Economic Community has been succeeding. The economic recovery of France in recent years has contributed to this. Trade exchanges between them have increased 50 per cent, since the Treaty of Rome. They have accumulated massive international reserves.

Yet the prospect of Australian benefit from this improvement will depend very importantly upon the internal policies adopted by the Common Market countries in relation to their own agriculture. If, and there have been suggestions of it, agricultural protectionism prevails, the entry of foodstuffs, from, for example, Australia, will become more difficult. The pricing policy adopted by the E.E.C. for its agricultural products will largely determine the size of the European market for imported agricultural products and the extent to which surpluses in given European countries can be exported. Price stabilization at the high levels now current in some member States will tend to increase production in the community area. Under the encouragement of high domestic prices, France is already developing an export surplus in wheat. These matters will be dealt with by my colleague, the Minister for Trade (Mr. McEwen). It is sufficient for me to say that the advantages or disadvantages to Australia, economically speaking, from the success of the Common Market will be largely determined by policies worked out in Europe.

It is difficult to assess the prospects. For example, wool is to enjoy free entry under the common external tariff. But it does not automatically follow that European economic growth will correspondingly increase the demand for wool. We hope that it will, but the fact is that although industrial production in The Six has been rising rapidly since 1957, there has so far been no increase in the volume of our exports of wool to these countries.

Our most definable interest arises in relation to our exports to Great Britain. I mention some - wheat, meat, dairy products, base metals, sugar, dried fruits, fresh fruit and processed fruits. These constitute the great bulk of our current exports to Great Britain of f 198,000,000 sterling. They enjoy a preferred entry into the British market, while meat and sugar are the subjects of special long-term agreements. In exchange for these preferences, Great Britain enjoys preferential rates in our customs tariff and currently exports goods to the value of £259,000,000 sterling to Australia.

Clearly, this mutual preferential structure comes into the arena of Great Britain’s negotiations with The Six. Should the other members of the European Free Trade Association - The Seven- decide also to apply for membership of the Common Market, which seems probable, there will be further important problems to be decided. If, to take a good example, Denmark acceded, and Great Britain acceded without securing a special position for Australian dairy products, the preference now enjoyed by Australia in Great Britain would be reversed into a preferential, because duty-free, entry for the Danish products.

I will not, in this general survey, go into the details of our exports which are involved. But I think it most desirable that I should point out to all the negotiators that if they want, as I am sure they do, a strong and growing Australia, they must recognize the peculiar Australian significance of the relevant industries.

Let me give an example to show what I mean. The development and populating of the north of Australia, from the Kimberleys in Western Australia through the Northern Territory to north Queensland depends primarily on beef cattle, minerals and sugar. The British market has been of commanding importance in all three. Wheat stands next to wool as our export staple; the welfare of at least two States is bound up in its success. The intensive settlement in the irrigated areas of the Murray and Mumimbidgee regions has been built up on dried vine fruits, processed fruits, and the production of fat lambs. Not one of these industries could exist on its present scale without large exports. In the case of dried fruits and fat lambs, the British market is vital; for processed fruit perhaps it would be extravagant to say that it was vital in the literary sense, but it is certainly vastly important.

Our great mineral resources, in relation to which great expansion is in sight, tend to be found in areas remote from the industrial cities and the agricultural areas. They come, when developed, to sustain large communities whose very existence depends upon a growing export for the products of the mines, refineries and smelters.

It follows from all this, and I take leave to emphasize this point, that severe blows to our export primary industries would fall with particular severity upon particular areas, industries and people. The impact would not be more or less evenly distributed over the whole nation, but would be concentrated and therefore more damaging.

We cannot as yet anticipate the result of the negotiations. We can, I think, reasonably assume that Great Britain will not accede to the Treaty of Rome unconditionally. Such an accession would bring to an end the Commonwealth preferential system which has endured for many years. It would be highly damaging to Australia, and could be disastrous to our neighbour and friend, New Zealand. As the preferential system operates both ways, it could mean the end of British Preferential Tariff rates in our tariff schedules.

On the other hand, it may be too much to hope at this stage that Great Britain will be allowed, by the necessary unanimous agreement of The Six, to maintain the Commonwealth preferential system completely unimpaired. Some compromise will no doubt be sought. We shall, of course, battle for the best possible arrangements for the protection of our traditional and legitimate interests. We cannot doubt that Great Britain will be on our side in that battle. We also have good friends in Europe, and can be assured of their understanding. I have already said something about some of the exports which are our special concern and need not repeat it. But we are not unaware of the suggestions, already being made in some quarters, that the emergence in practical form of the Common Market issue has suddenly made the Australian

Government aware of the need to develop new and diversified markets.

The suggestions are quite unfounded, as 1 shall quite easily show. The matter has not arisen with the suddenness which recent publicity may suggest. We have for some time known that attempts would be made to bring The Seven and The Six together. I myself had some purely general talk about this with both Chancellor Adenauer and President de Gaulle in 1959. But no detailed proposals were ever put to or considered by us because, and I remind honorable members of this, first, it was the specified object of Great Britain to keep agriculture out of any negotiations, thus preserving our own and British interests, and secondly, it was made clear that before any negotiations were decided upon, we would be effectively consulted.

In London, immediately after the last Prime Minister’s Conference, I proposed, and the proposal was accepted, that our officials should go into preliminary conference in London, so that, getting down to brass tacks, we could identify the points of difficulty and try to find common methods of approach.

Mr Pollard:

– Why did you not tell this Parliament about it?

Mr MENZIES:

– I did. The honorable member must have been asleep. That conference preceded the vists of Mr. Sandys; a visit which produced, for the first time on the political level, a specific exchange of views. Meanwhile much official study has been made in the relevant departments.

The matter has, therefore, not come suddenly out of a blue sky. From Australia’s point of view, neither time nor ground has been lost. Indeed, we have been active for years in strengthening and diversifying out exports to whatever markets we could find.

When, in January, 1956, I announced the creation of the Department of Trade, I pointed out that it would direct its major attention to the stimulation of trade. It has, with the backing of the Cabinet, acted vigorously in this field. It has continued to intensify the trade drive through the efficient and widely appreciated Trade Commissioner Service. In 1949 there were seventeen posts in twelve countries. In 1961-62 there will be 37 posts in 28 countries. Since 1949 we have opened posts in Karachi, Rome, Trinidad, Bonn, Montreal, Salisbury, Auckland, Manila, Christchurch, New Delhi, Kuala Lumpur, Bangkok, Stockholm, Chicago, Ottawa, Nairobi, Accra and Beirut, with plans already announced for opening in Lima, Caracas and Teheran. The trade publicity vote has increased from £16,000 in 1949 to £1,000,000.

In July, 1956, we established the Export Payments Insurance Corporation. On 30th June, 1961, current policies were valued at £26,000,000, the export transactions covered being spread over 120 countries, mainly in Asia and the Middle East.

Since 1954 we have organized thirteen major trade or survey missions, and have co-operated with industry associations in the organization and despatch of two trade ships. Another trade ship is planned for the Persian Gulf in the new year, and trade missions to the Middle East, Pacific Islands, and South America will be organized during 1961-62.

There were three passages in the cornmuniqué issued at the end of our talks with Mr. Sandys which deserve special mention. The first showed that the Australian Government took a view of the impact of Great Britain’s membership of the Common Market upon Commonwealth relations different from that of Great Britain. The second showed that we refrained from giving approval to the opening of negotiations, although I may say that we were not asked to do so. The third made it clear that we wished to take an active part in the negotiations affecting our special interests.

These statements have been interpreted by some as indicating a spirit of hostility in our discussions, or at least a lack of a co-operative Commonwealth approach. I want to make it clear that our discussions were conducted on a proper Commonwealth level; our common interests never forgotten, but our particular interests zealously expounded and upheld.

I should perhaps repeat our genera] attitude, for the benefit of the people of Great Britain as well as our own. We want whatever decisions are finally taken to bring added strength to Great Britain, for her own sake, for our sake, and for the sake of the world. For we are both British and Commonwealth. But our first duty is to protect what we believe to be the proper interests of Australia, whose future development will be a considerable factor in Commonwealth strength, and will in particular produce economic advantages for Great Britain herself. We do not doubt that this is understood and accepted by Great Britain. There is therefore much common ‘ground upon which to stand. But the problems will not be solved’ by saying that we have common objectives. The real issues will be those of method. Some long-accepted ideas may need to be modified; there will be conflicts of opinion; the advocacy of lawful interests may produce high and intense argument. But such matters are in the British tradition. We need not fear them, nor pretend that they do not exist.

The decision that will ultimately be taken by Great Britain, to enter on the negotiated terms or to stay out, will be the most momentous peace-time decision in living memory. Upon its wisdom and success probably the future of the free world and most certainly the future of our own family of nations will turn. It follows that Australia will bring to her own negotiations with Great Britain and, as we venture to hope, with The Six, not only the most powerfully presented exposition and defence of her own interests, for her own future is our special care and responsibility, but also a strong and wide sense of common responsibility. It will have been observed, Sir, that Great Britain has put The Six on notice of these complexities. She has told them that Great Britain must take account of the special Commonwealth relationship as well as the essential interests of British agriculture and of the other members of the European Free Trade Association.

I now turn to the broad political issues. We believe that the entry of Great Britain into the European Economic Community would have far-reaching political implications. As we see it at present, we believe that it would mean a substantial departure from, or even an abandonment of, the traditional British policy of the balance of power, a policy which basically represented a form of isolationism, of freedom from what I may call standing or permanent obligations. True, as Mr. Macmillan pointed out in the House of Commons on 2nd August, “ in every period when the world has been in danger of tyrants or aggression, Britain has abandoned isolationism “. Nevertheless, I point out that a decision to enter the European Economic Community expressed to be a permanent body, and with political overtones of the clearest kind, would represent the abandonment of the old position and the acceptance of permanent European involvements. I thought that Mr. Macmillan accepted this when he said, in the same speech, that while European federation should be rejected, a confederation of European nations was an acceptable concept with which Great Britain could associate willingly and wholeheartedly.

The distinction between the organic distribution of sovereignty which exists in a federation and the looser association of a confederation is one which I was personally at pains to make in our discussions with Mr. Sandys. But even a confederation involves mutual political obligations of a continuing kind. A few days after we had been pointing this out in the Canberra talks, the heads of state of The Six issued a communique, dated 18th July, which gave special point to the argument. The communiqué stated that the heads of state and governments were convinced that only a united Europe is in a position, allied with the United States and other free peoples, to meet the common dangers of the free world; that they were determined to develop their political co-operation with the aim of European unification; and that for this purpose they proposed to have regular meetings in order to bring their policy into line and reach agreed views.

Of course, Sir, we need not suppose that European unification is just round the corner. National histories and prides and characteristics are not so easily set aside. But it does seem clear that, as the Rome treaty’s economic provisions become effective, there must be a closer co-ordination, if not actual integration, of political policies. For where there is a common economic system established and made enforceable by law, the journey to confederation or even federation is half accomplished. Common domestic policies will cry aloud for common external policies to protect them.

If Great Britain joins, and other Western European nations with her, and Europe becomes, step by step, a great power, or a cohesive agglomeration of power, Great Britain will become, we would hope and expect, a most important integer in that power. But she will, ex hypothesi, cease to be completely independent in relation to European affairs. This is why the decision which she must make after the proposed negotiations is so politically momentous.

We do not doubt the strength of the broad political considerations which lie behind the decision to negotiate. Some of them clearly are - and I state them succinctly -

  1. the importance of the cohesion of free Europe as an area of resistance to Communist threat and aggression;
  2. the fear that the perpetuation of economic rivalries and differences in Europe will mean political rivalries and differences, and so weaken the joint will and capacity to resist the Communist threat;
  3. the importance of influencing that area from within, if it needs such influence, to maintain positive and outward-looking policies which will be non-neutralist in character; and finally,
  4. the belief that Great Britain, as an influential member of the European Economic Community, will bring added strength to British Commonwealth consultations.

Sir, I have stated these matters so that it may not be said that we have failed to see the arguments on the great issues, and have adopted a small and unimaginative view.

We understand, and we freely acknowledge, that if true European unity can, in spite of the history of the last 100 years, be brought about, the prospects of world peace will grow brighter. But, as a senior Commonwealth country, we have felt bound to say that we do not think that the Commonwealth as a political organism would be strengthened. Great Britain, as the centre of the Commonwealth, has in the past spoken for herself at Commonwealth Conferences. After entering the new Europe, with its common policies and institutions and rules, she could no longer speak with detachment. The Treaty of Rome cannot be approbated and reprobated at the same time. Nor could a growing interest, and, more than interest, involvement in Europe, be calculated to leave completely untouched the present British position in and around Asia and Africa.

It is for these reasons that we have publicly expressed our grave doubts of the continuance unimpaired of the Commonwealth to which we are deeply attached, with which we have stood in peace and war, and the existence of which still means much to civilization. We may be wrong on this matter. We sincerely hope that events may prove us wrong. But, as much is being said about the impact of any accession to the Treaty of Rome on the Commonwealth in its present form, we think it proper to express our own view. In the long run, of course, the stern facts of contemporary history may require some abatement of the special Commonwealth relation in favour of a powerful European unity: we do not as yet know. But it would be a mistake to pretend that there was no change when in fact there had been a great one.

We have not based our opinion upon any narrow ground of the importance of absolute sovereignty. All international pacts, from the United Nations to the North Atlantic Treaty Organization and the South-East Asia Treaty Organization, involve the exercise of sovereignty to limit, by free choice, liberty of individual action. But neither United Nations nor Nato nor Seato is a super-state. Parties to the agreement may leave as they think fit, in the exercise of the very sovereignty by which they joined. The Treaty of Rome, as I have pointed out, is different. There must be unanimous agreement for the joining and the leaving. Complete independence of action no longer exists.

We pronounce no dogma. We do not seek to turn back the great tides of international affairs. We do not say that the

British view of the effect upon the Commonwealth of a decision by Great Britain to go into Europe is demonstrably wrong. In the present state of the world, with bullying and bluster our daily diet, it may be that the Commonwealth must once more change, for the common good. Our belief is that a change is, in fact, involved. That being so, we feel bound to state our belief with firmness but with goodwill.

Even a cursory examination of the Treaty of Rome and its proposals will indicate, as I have briefly indicated before, the immense variety and complexity of the matters to be negotiated. The decision as to whether we should participate directly in those negotiations which affect our special interests does not depend on Great Britain, but on the willingness of The Six to permit it. We are, however, confident that Great Britain will do her best to bring it about. So far as we can judge at present, the actual negotiations, once begun in, say, October, will last for at least six months. They will need to be preceded by close exchanges between Great Britain and the other Commonwealth countries, some time next month. If these preliminary talks are to prove valuable in a fairly short time, our representatives will need the best possible briefing from this end. For this purpose, we have established a special committee of Cabinet, to sit frequently and to be available at short notice, working in conjunction with senior officials and expert advisers. Important decisions will need to be made at this end, not only before but during the course of the negotiations themselves. For the problems confronting our export industries are so great that every last detailed care must be taken to solve them in a way which protects, and indeed enlarges, our national, developmental, and trading future.

I lay on the table the following paper: -

Australia and the Common Market - Ministerial Statement - ;and move -

That the paper be printed.

Suspension of Standing Orders

Motion (by Mr. Townley) - by leaveagreed to -

That so much of the Standing Orders be suspended as would prevent the Leader of the -Opposition (Mr. Calwell) speaking for a period not exceeding 45 minutes.

Mr CALWELL:
Leader of the Opposition · Melbourne

– I thank the House for its courtesy. The Federal Parliamentary Labour Party has this to say about the decision of the United Kingdom Government to apply for membership of the European Economic Community, commonly known as the European Common Market: We recognize the economic and political difficulties of the United Kingdom Govern. ment and concede its legal right to do as it thinks proper in relation to entry to the European Economic Community. We do not disagree with the Australian Government’s view that, to use the words of the Prime Minister’s speech, a copy of which he kindly gave me a few hours ago to peruse before I came into the House -

The decision of the Government of Great Britain to negotiate for admission to the European Economic Community is one of enormous political, economic and historic importance for Great Britain herself, for Europe, for the Commonwealth in general and Australia in particular, and for the world.

We, for our part, believe that the effect on Australia and the Commonwealth if and when the United Kingdom joins the European Economic Community cannot be determined until the terms of the United Kingdom Government’s entry are settled. But we believe also that the United Kingdom will enter the European Economic Community on the best terms that it can secure, and that its entry will not be long delayed.

We emphasize that not only should Australia be kept fully advised by the United Kingdom of the progress of its negotiations with the European Economic Community but also that we should seek to participate in our own right in any negotiations affecting Australia’s interests which, to us, must be paramount at all times. The Prime Minister (Mr. Menzies) has emphasized that the Government will do this. We have our own criticisms to offer in respect of what we feel to be the Government’s failures to date, but at any rate, even at this late hour, Australia is taking action to protect its interests in this most important matter.

We of the Opposition emphasize that to date it is uncertain whether the terms which will govern the United Kingdom’s entry to the Common Market will continue to guarantee, for some limited period only, preferences to which Australian primary products are entitled in United Kingdom markets under the Ottawa agreement, or whether those preferences will disappear altogether. But, whatever happens, the Australian Labour Party is of opinion that many of Australia’s exports, especially our primary products, could be adversely affected, with consequent danger to employment, standards of living and development in Australia, as well as to Australia’s balance of international payments, unless arrangements are made to protect our interests in Great Britain. We of the Labour Party wish to emphasize that steps should have been taken to seek alternative markets for our threatened exports immediately the Common Market was formed, and that the need is greatest now that Great Britain has actually applied for membership of the European Economic Community. We as a party have not been dilatory about this particular matter, because in 1957, when Senator Hendrickson and the honorable member for Gellibrand (Mr. Mclvor) returned from an international conference where they had met Mr. Hugh Gaitskell, the Leader of the Opposition in the House of Commons, Senator Hendrickson raised in the Senate the question as to what the Australian Government’s attitude would be if, ultimately, Great Britain were forced to join the Common Market. I just want to say, interrupting myself, that I do not disagree with the general outline of the course of history as the Prime Minister has given it to the Parliament; but it was evident in 1957 that events were occurring which would move to their inevitable end in a very short space of time. On 16th May, 1957, in the Senate, Senator Hendrickson addressed a question to the Minister for National Development requesting that the Government prepare a preliminary, authoritative memorandum on the subject of the projected Common Market, and have it distributed to members of the Parliament and to other people. The Minister in charge of the Government in the Senate said in reply that the matter was of profound significance from a commercial point of view, but he could say no more than that he would put the honorable senator’s suggestions before the Minister for Trade, and very much doubted whether the Minister would adopt them. Because the problem had very many ramifications it would be difficult to prepare a factual statement upon the sub ject, let alone to express opinions on it in answer to a question. A few months later, on 2nd October, 1957, the same senator returned to the subject and got much the same reply. On at least a dozen occasions subsequently, until quite recent times, he kept, if I may use the vernacular, plugging away at the subject; but it was not until the British Government decided to send Mr. Sandys to Australia to consult with our own Government that the subject became of first-rate importance to the Australian Government and became of headline importance in the Australian press.

The problem, as I have pointed out, has been urgent since 1957. There can be no doubt about that, because anybody who has studied the history of Europe in the postWorld War II. era knows of what has been occurring in that very battered continent. After World War II. Europe looked in two directions for a means of recovery - economic co-operation between the countries of Western Europe and aid from the United States. The initial steps were taken in 1948, when the Organization for European Economic Co-operation was established and Marshall Aid began. These events, Sir, set the pattern in the next decade. With O.E.E.C. Europe entered a period of relatively free trade which contrasted strongly with the era of protectionism between World War I. and World War II. This development provided the background to European economic recovery; but it was made possible only by the huge flow of funds into Europe initially through Marshall Aid but later on through private investment from the United States and, more latterly still, through invesment from Great Britain. imperial Chemical Industries Limited had been one of the great and important organizations which had been pouring money into Western Europe. So great has ‘been the improvement in economic conditions in Western Europe that, according to figures which, strangely enough, I read in Hobart the other day in the Hobart “ Mercury “ of 19th Jul v. production in the European Common Market area over the last three years has increased, on average, by 27 per cent. For Italy the increase has been 50 per cent, and for France it has been 40 per cent. In the same period the increase in ‘production in Great Britain has been only 9 per cent

So Great Britain has had to face an inescapable decision, which she has made. She has had almost, figuratively, to bang on the doors of the European Common Market nations and ask to be admitted. England has made the decision she has made because it is the only decision by which she can survive, and nobody would want to wish her ill. But, of course, her decision will not necessarily help Australian interests, and that is why we must watch our own position and do the best that we can, in friendship with Great Britain and in friendship with the Western European countries, to see what we can do to protect our own interests - and, if we cannot protect our own interests, to find new markets for our products elsewhere. This, of course, is primarily a question for the primary producers of Australia whose markets are most threatened under this new plan. We of the Labour Party were never very friendly disposed towards the Ottawa Agreement. We always thought that Australia got the rough end of the deal in that agreement, and that it suited British manufacturers more than it suited Australian primary producers. But we are integrated at this particular moment in the British economic setup, and if we have to make a decision suddenly, if we are jolted out of our present relationship, we ought to have some alternative markets in which we can sell our goods and some alternative scheme which will be of equal value - at least equal value - to our own people.

We say that the problem, which has been urgent since 1957, has, as far as Australia is concerned, become almost desperate in 1961. It is because of the Government’s failure during the last few years to foresee all the dangers that were obviously ahead, and to prepare for the threatening emergency, that we regard the situation, as now existing, as posing a national danger which transcends party politics. We are very concerned about the future of this country because, if we lose our markets in Great Britain, and corresponding markets cannot be found in the Common Market area, then our primary products may not be sold - and if our primary products are not sold employment is endangered not only for our primary producers but for many other Australian people as well. We will not be able to sell abroad in order to gain the finance that we need to buy the essential capital and consumer goods that we have to import in order to keep our factories and industries going. We are one of the countries which is dependent almost entirely on the export of primary products, and a drought here, or a disaster in Europe, such as a war or an economic blizzard, or a development of this sort, can adversely affect us to a considerable degree.

Mr Jeff Bate:

– It can be a calamity.

Mr CALWELL:

– It can be a major calamity. As Australians anxious to see our country prosper and grow stronger we of the Labour Party will use our best endeavours to help it to avert the dangers that confront it, or to alleviate the effects of a situation which the Government’s neglect has created. We have heard the Prime Minister say to-night that he has given this matter consideration over a period of time. We have no doubt that he has thought about the matter on his rather numerous trips to Europe. But it was not until he said quite recently that two years ago he had interviewed General de Gaulle and Herr Adenauer that we knew that he had taken any interest in it at all. He never reported to this Parliament the fact that he had visited General de Gaulle or Herr Adenauer, and he never mentioned it to the Australian people. Did he ever mention it to his Cabinet or to his party? It was of vital interest to all Australians to know that their Prime Minister was at least concerned with what was happening.

Mr Menzies:

– If they did not know of the visits I must have worn a false beard.

Mr CALWELL:

– I do not think that the right honorable gentleman wore a false beard at all. I think he might have been more concerned about a Test match at Lord’s or somewhere else.

Mr Menzies:

– You must think other people are as silly as you are.

Mr CALWELL:

– I do not think I am silly, but that is the sort of insulting observation which the Prime Minister is used to handing out. As a matter of fact, now that he wishes to exchange compliments, let me tell him that the report is current that when Mr. Sandys arrived in this country he believed, on the word of the Prime Minister, that the Australian Government was prepared to back Mr. Macmillan’s Government in this matter. But on arriving here he found that the position was different. The Treasurer (Mr. Harold Holt) made one speech supporting Mr. Sandys in the Cabinet room and after he was taken out and brain-washed he came back and made a speech in the opposite direction. That was because the Country Party Minister for Trade (Mr. McEwen) had jacked the Government up and said that the Country Party was not prepared to accept this attitude on the part of the Liberal Party members of the coalition Government.

I shall return now to my inquisitorial role. In what capacity did the Prime Minister negotiate or discuss this vital question with General de Gaulle or with Herr Adenauer? Was it on behalf of Mr. Macmillan, as he so often assumes to negotiate, or was it as Prime Minister of Australia? Apparently his mission, in whatever capacity he operated, was a failure, because France and West Germany have continued to ignore the United Kingdom and Australia. At all events the Prime Minister was consistent. He had the same measure of success in his negotiations with those two Heads of State as he had with Colonel Nasser in 1956, and at the United Nations when he moved an amendment to the motion submitted by Pandit Nehru and got five votes out of a possible 97.

The Prime Minister has attempted to create before the Australian people the image that he is the great father of the Australian community and the only one capable of protecting Australia’s interests. He has tried to create the impression that he is anxious to protect them at all times and that if every thing is left in his hands every thing will be all right. But it will not be all right, because things that have been left in his hands up to date have turned out failures.

Let us now get back to the historical side of the story. The essential fact about the European situation is that France and Germany are standing together. This is the first time since the days when Palmerston was Foreign Secretary that England has not been able to separate France and Germany. Because she has been unable to separate France and Germany she has been com pelled to accept the decision of those two countries on the Common Market issue. The Prime Minister referred to balance of power politics. It was all right in other days, while it was possible to have the Entente Cordiale and the Triple Alliance and all those other power groups in Europe, but it is not all right to-day. For the first time in 400 years Europe is returning to unity and sanity. The sooner the whole of it returns to unity and sanity; the sooner we have a United States of Europe which includes not only the Common Market - The Six - but also the European Free Trade Association - The Seven - and Russia as well - yes, I stand by that - the sooner we have a bloc of European nations 500,000,000 strong then the sooner we will have no more wars, the sooner the European community will be able to balance itself against other peoples and the sooner will other people not be able to play us European or European descended people off, one group against another.

The Prime Minister referred to what has happened in the last 100 years. That fratricidal struggle - sometimes civil wars and national wars, religious wars and everything else which have disgraced Europe - has gone on not for 100 years but for 400 or 500 years, and the sooner it all ends the better. What has happened in connexion with the formation of the Common Market is basically a good thing and it will be a good thing if Britain can enter it also. We would not wish to deny Britain any of its rights, but what does the Prime Minister of Australia say? In this matter he says, “ We refrained from giving approval although we were not asked to do so “. Was that not a great decision to make? You do not refrain from giving approval unless you are asked to do so. It is not for this Government to patronize the British Government by giving or refusing approval. After all, the British Government has some rights of self-government left, even at the hands of the Menzies Government. It still had some rights left in regard to its attitude over South Africa, no matter what the Prime Minister might have said to some of his critics at his Savoy Hotel dinner, when he told them to jump into the Serpentine.

We of the Labour Party regard the British people as Europeans, and we are of European descent. We have to try to live with them and we have to try to live with the Asian peoples. We have to try to trade with all people. Our trade with the peoples of the Common Market area is increasing, but our trade with Great Britain and with the North Atlantic countries is decreasing. We want to try to promote trade, but we are uncertain as to where our trade will go if we are immediately cut off by some decision forced on us by the attitude of General de Gaulle; he will make the final decision regarding Britain’s entry into the European Common Market. We hope we will be able to preserve our trade preferences for a few years, or at least until our agreements run out. But progressively, the European Common Market countries are reducing their tariff barriers. They started off with a reduction of about 10 per cent, and last year they reduced the barriers by from 40 to 50 per cent. It will not be long before they have free trade throughout their countries and when they have a universal free trade area we will be very adversely affected.

I am not concerned with what will happen to British agriculture because I think that that can easily be made the subject of negotiation. British agriculture is protected by tariffs as well as subsidies. In the European Common Market area agriculture is protected primarily by subsidies. That is something that can well be negotiated. The European Free Trade Association countries associated with Britain will follow Britain if Britain wants to go into the Common Market area. Already, Denmark has applied for admission and so will Norway once Britain is admitted. The European Free Trade Association is in process of disintegration at this moment.

The United Kingdom Government has known for a long time that the move that we are discussing to-night would have to come sooner or later. The Opposition thinks that the Australian Government should have taken time by the forelock. It should have been concerned about these moves much sooner than it was. The Opposition has always wondered when the Government was going to do something about the matter. As I have said, the Opposition in the Senate raised the matter several times and we also raised it in this House. We kept waiting to see what the Government would do.

I am certain that unless something is done to protect Australian markets for primary products the primary producers in Australia will be the hardest hit - perhaps not in the next two or three years, but ultimately - and markets will have to be found for them. This is a matter about which we would like to hear something from the Australian Country Party because it is vitally concerned in the question. We would also like to hear from those Liberal Party members who represent country seats. On behalf of the Opposition, I move -

That all words after “ That “ be omitted with a view to inserting the following words in place thereof: - “ this House, while declaring that the United Kingdom’s move to join the Common Market requires the strongest action to protect Australia’s interests, expresses no confidence in this Government’s ability to provide it because oi its lack of foresight and frankness in this matter, its dilatoriness now, and its continuing failure, as demonstrated by the Prime Minister’s speech, to appreciate the real issues which are involved “.

I think that that motion represents the feeling of the Australian people. It is a censure which the Prime Minister has earned as he has earned many other censures from the Australian people. Although he said recently that he did not need the advice of experts on how to handle the economy, he admitted in his speech in opening this debate that when he was considering what to do about alternative markets he would have a lot of experts around him and that they would be in constant session for the next six months - at long last advising on a plan to deal with the situation.

Mr Ward:

– I second the amendment.

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– Mr. Speaker, the speech of the Leader of the Opposition (Mr. Calwell) was a speech of clowning: it had no substance in it.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Mr. Speaker, I think that that remark should be withdrawn.

Mr SPEAKER:

– Order! 1 ask the Minister to restrain himself a little.

Mr ADERMANN:

– The Leader of the Opposition said two things-

Mr Calwell:

– What a silly looking galah!

Mr. SPEAKER (Hon. John McLeay).Order! I must ask the Leader of the Opposition to withdraw that remark.

Mr Calwell:

– If the Minister can say that I was clowning I am entitled to call him a silly looking galah; but if it is out of order I withdraw it.

Mr ADERMANN:

– The Leader of the Opposition said two things: He said that the Opposition agreed with the Government’s approach to this matter.

Mr Calwell:

– I said nothing of the sort.

Mr ADERMANN:

– Although the honorable gentleman said that the Government should have taken action earlier, I think the words I have used are a fair representation of his remarks. He talked for about half an hour and dealt with all sorts of other matters which were irrelevant to the paper before us. He was unable to show where the Government had failed to take any necessary action.

The move by the United Kingdom Government to seek membership of the Common Market indicates a change of mind on the part of that Government. When the Common Market was formed the United Kingdom chose not to have anything to do with it. Because of the economic situation, however, and the necessity to look for further markets, the United Kingdom changed its mind and has now decided to get into the European Common Market.

As the Prime Minister (Mr. Menzies) has pointed out, Australia has done its best to find new outlets for its produce. The Australian Government has appointed trade commissioners to a long list of countries. The Leader of the Opposition did not mention any respect in which the Government had failed to take action. I shall remind him of some of the actions taken bv the Government to prepare for any eventuality with respect to our overseas trade. The first country that I shall remind him about is Japan. The trade agreement tha’ we made with that country brought us not less than £162,000,000 worth of trade in the last financial year. The present Leader of the Opposition and his colleagues fought b>terly against that agreement in this House.

Mr Pollard:

– You have filled the country with luxurious rubbish from Japan

Mr. ADERMANN__ If the honorable member for Lalor suggests that imports from a country which takes £162,000,000 worth of our exports are luxurious rubbish, then we know what his representations are worth. I want to answer one other statement as an Australian Country Party Minister in this coalition Government. The Leader of the Opposition suggested that the Treasurer (Mr. Harold Holt) had disagreed in Cabinet with the approach of the Prime Minister (Mr. Menzies) or the Australian Country party or of some one else in this matter. The truth is that never has the Cabinet been more united than it has been on this very vital issue. Ministers have stood side by side in Cabinet and out of Cabinet on this issue. We recognize that it is a vital issue. The Country party, of course, recognizes that it is vital to primary industry.

I tried to make some notes about what the Leader of the Opposition said. He was unable to point to any failure on the part of the Government. He said that we had delayed. But what earlier action could we have taken? We have sent trade commissioners throughout the world. We have sent trade ships everywhere. We have made international trade arrangements. Wherever it has been possible we have built up our overseas trade until last year we exported about £900,000,000 worth of goods. Last year our total exports amounted to over £900,000,000, which, as 1 said in answer to a question this afternoon, was a record for our primary industries.

Let us look at the position. If the United Kingdom, because of economic circumstances, or a need to find extra markets for its manufactured goods, or because its home market has declined, finds it necessary or expedient to enter the European Common Market, then, as even the Leader of the Opposition admits, that is a matter for the United Kingdom Government alone. We do not object to that Government making its own decisions. That is none of our business; the decision rests entirely with the United Kingdom Government. But I point out that we did say in our communique that our attitude did not necessarily imply approval of the United Kingdom’s proposed entry into the European Common Market.

The Leader of the Opposition suggested that we had no right even to say that. Let me say to him that had we been indifferent to the interests of Australian primary industries we would have been neglecting our duty to protect the export markets we have built up and ‘the Australian economy. Honorable members must realize that more than the Australian primary producers would be concerned if our overseas credits were being reduced continually or if our markets were lost overnight as the result of action taken by some other government.

Of course, we are seeking alternative markets. 1 have stated that our sales of wool to the United Kingdom have declined. In the last financial year we sold only £56,000,000 worth of wool to the United Kingdom, but sales to other countries have increased. The Leader of the Opposition stated that our trade with the European Common Market countries has been increasing, but an examination of the figures discloses that during the last financial year our sales to both the United Kingdom and the European Common Market declined. In 1959-60 we sold £175,000,000 worth of goods to the European Common Market, but in 1960-61 that sum fell by £21,000,000 to £154,000,000. I admit that the figures have varied over the years. In 1956-57 and 1957-58 our sales to the European Common Market were higher than they were last year. Of course, 1958-59 was a year in which Australia was very short of wheat. Because of the circumstances obtaining in our own country, we were unable to supply goods to some markets. In that year our sales to the European Common Market countries were lower than they were during the last financial year. That position obtained also with respect to sales to the United Kingdom and other countries.

In 1959-60 the value of goods sold to the United Kingdom was £247,000,000, but in the last financial year that figure dropped by £15,000,000 to £232,000,000. Ignoring the year in which we were short of wheat, there has been a steady decline in our exports to the United Kingdom since 1956-57. In those circumstances, it is only natural that the Australian Government should make every possible effort, by setting up trade posts, by appointing trade commissioners, by sending trade ships overseas and by entering into international agreements, to establish the alternative markets that we need so badly.

When we look at a picture of the world to see what markets we might find in addition to those we already enjoy, the most promising seem to be those in the near East, in the Asian countries, but it must be apparent to everybody that unless we cater for the diet of the people of those countries, as the dairying industry and the wheat industry are attempting to do, those near East-Asian countries, because of their economic position, have only a limited capacity to buy from us.

Mr L R Johnson:

– Are you in favour of trade with China?

Mr ADERMANN:

– 1 was not talking about China; I was talking about the Asian countries in the near East. The dairying industry has sought to cater for the near East trade by creating products suitable for tropical climates. The dairying industry is the most vulnerable of our primary industries. The world production of butter is about 4,000,000 tons a year. Of that amount, 1,000,000 tons is produced in the Common Market countries, so there would be no alternative market for Australian dairy products there. Indeed, should we or New Zealand be so unfortunate as to lose our United Kingdom market, no alternative market can be readily seen. The United States of America has more or less put an embargo on the importation of butter from any other country by issuing quotas. Australia’s ridiculously low quota is nine tons a year! There can be no doubt that the Australian dairying industry is in a most vulnerable position and is the industry most likely to be affected if the United Kingdom enters the European Common Market. It Denmark also entered that market, the Australian dairying industry could lose to Denmark the preference it now enjoys in the United Kingdom.

Certain of our commodities are protected by agreements with the United Kingdom. For instance, under the sugar agreement, which does not expire until 1968, the Australian sugar industry has an assured market in the United Kingdom for 300,000 tons a year, but I point out that we also supply approximately 300,000 tons at world market prices. Those sales at world market prices could be adversely affected by Britain’s subsidizing its beet sugar industry in agreement with other European nations.

The agricultural policy of the European Common Market has not been specifically stated or, to put it in another way, there is no real blue-print of the policy on agriculture within the terms of the Treaty of Rome. Rather, what has been embodied in the treaty is a diplomatic statement designed to enable agreement to be reached in the face of important divergences of interest. If we were to summarize the objectives, we would say that it was a marketing policy aimed at integrating the agricultural products of member States on a common market with the characteristics of a single national market.

Having regard to all the subsidies that are paid, not only by the United Kingdom but also by the European nations within the Common Market, one thing that is evident is that if a tariff barrier were set up against those goods which now enter the United Kingdom duty free, the cost of living in the United Kingdom would increase. That is one part of the price the United Kingdom would have to pay.

The proportion of population depending on agriculture for a livelihood is over 20 per cent, in the Common Market countries, compared with 13 per cent, in Australia, 12 per cent, in the United States of America and 5 per cent, in the United Kingdom. The farmers are already protected and supported by the governments in all the countries concerned. Individual support systems cannot be wiped out, but will have to be replaced by new compromise solutions acceptable to all member countries.

A special section of the Rome treaty stipulates that abolition of trade barriers shall be accompanied by the establishment of a common agricultural policy under which the market for agricultural products will be regulated. All countries of the European Common Market are important agricultural producers. I think it is interesting to note that the European Economic Community produces five times as much wheat and other grains as does Australia. Its sugar production is almost equal to that of Cuba. It produces the world’s largest apple crop, 1,000,000 tons of butter, 3,000,000 tons of beef and even a larger production of pork. The production of the European Economic Community is expanding and has risen by 30 per cent, since 1950, mainly by the use of modern farming methods.

In the few minutes left to me, I want to emphasize that the Commonwealth Government’s approach to this matter is to adopt a constructive and not a destructive attitude towards United Kingdom negotiations with countries of the European Economic Community. The Government appreciates that a wider grouping in Europe could result in increased prosperity there and, under appropriate conditions, an increased demand for products f.om third countries such as Australia. The Government is apprehensive, however, that the proposed policies of the European Economic Community, if adopted by the United Kingdom, will have serious adverse effects on Australia’s exports. Therefore, the Government must take all possible action to ensure that the vital interests of Australian export industries are affected to the minimum possible degree if the United Kingdom does decide to join the community.

Opinions may differ as to what the precise economic and trade effects of United Kingdom accession will be, but it is obvious to any one who has studied the facts that, unless the United Kingdom is able to obtain wide derogations from the present provisions of the Rome treaty, much of Australia’s trade with the United Kingdom in primary products will be at risk. If the United Kingdom accepted the Rome treaty as it stands, this would mean the end of the United Kingdom-Australia trade agreement and of all Australian preferences in the United Kingdom market. Instead of our present free and unrestricted entry and our preferred position over non-Commonwealth suppliers in the United Kingdom, we would be faced with a common external tariff and other protective devices, and would be at a serious disadvantage compared with members of the European Economic Community who would obtain free entry into the United Kingdom market.

I cite, for example, our canned deciduous fruits. Australia at present enjoys a preferential advantage of 12 per cent, over most-favoured-nation suppliers of these fruits. If the United Kingdom accepts the Rome treaty, Australia will face a tariff of 27 per cent. Thus, Australia would have to compete on equal terms with the United States of America, our chief competitor, and would have to face competition from the countries of the European Economic Community with preferences of 39 per cent reversed in their favour. The loss of preferences and the application of the common external tariff to our primary products are only one aspect of the problem in respect of primary products. Most primary products will be included in the common agricultural policy of the European Economic Community.

Mr DEPUTY SPEAKER (Mr Wight:

– Order! The Minister’s time has expired.

Mr BEAZLEY:
Fremantle

.- The period after the First World War and the period after the Second World War saw a marked contrast in the policies embarked upon by the victorious allies. After the First World War, the policy was the dismemberment of the Austro-Hungarian Empire and the payment of heavy reparations by Germany. After the Second World War. the allies reverted to what had been an earlier and more effective British tradition and policy such as was pursued at the Congress of Vienna, and they sought to restore to the community of nations the defeated powers. As a consequence, the United States of America, in the course of making enormous gifts totalling 35 billion 700 million pounds for the rehabilitation of damaged economies, made gifts of almost three billion pounds to Germany and Italy, laying the foundation of their post-war restoration.

Nobody looking at the period of history between 1918 and 1939 could ask for a reversion to the policy which made inevitable the rise of Hitler and which, in the destruction of the Austro-Hungarian Empire, almost destroyed permanently the stability of south-east Europe. What is now taking place in the European Economic Community is not to be discussed merely in terms of its effect on our canned fruit trade. If the policy now being pursued by the United Kingdom Government means that the keystone of British foreign policy in Europe is to build the unity of Europe, that is a source of tremendous encouragement for all sane forces in the world. The world has twice paid a terrible price for the disunity of Europe.

The most significant post-war development in Europe is the new understanding between France and Germany, and the strengthening of that understanding over the past decade. To-day, we need the unity of Europe in order to survive. Europe has had a surfeit of hate. Hate, as a driving force for nations, belongs to the stone age, not the atom age. No item of Australian policy should be directed towards perpetuating division. We need a policy adequate to contribute to the unity or Europe.

The British Prime Minister, Mr. Macmillan, in his speech in the House of Commons on 3rd August when the House endorsed his action to approach the European Economic Community by an enormous majority, said -

After the last war, the process of reconciliation in Europe was itself a deliberate and positive act in which forbearance and even forgiveness played their part . . . Meanwhile, there has grown up a practical application of the aspiration towards unity in continental Europe by the formation of the European Economic Community. . . Whatever views are held of what should be our relations with the European Economic Community, every one will readily acknowledge the tremendous achievement involved. Its most striking feature, of course, is the reconciliation of France and Germany.

Speaking of the present division between the European Free Trade Association and the European Economic Community, Mr Macmillan said -

I am myself convinced that the existence of this division in Europe . . . undoubtedly detracts from the political strength and unity of Western Europe . . . We have a duty to seek some means of resolving the causes of potential division.

These are very great propositions. There are some industries in this country which will be sharply affected. It is difficult to see in them, however, a case for urging Britain to abandon the great contribution Britain can make to sanity, stability and peace in Europe and, hence, in the world. We have been urged in this country, sometimes by the Prime Minister, to what has been described as an enlightened self-interest. Self-interest is what others see; enlightened is what we call it. Self-interest is sometimes defended as the principle by which democracy functions. It is more often the reef on which democracy founders. We need to be ahead in the diagnosis of and the remedies for world problems. A policy which meets the needs of Europe will not work against the interests of the world.

The European Economic Community grew out of the European Coal and Steel

Community. The European Coal and Steel Community grew out of Robert Schumann’s conviction that the nations of Europe were beginning to revert to their old ways of nationalistic diplomacy which would destroy them. He realized that the saving of these generations of the young people of Europe from a repetition of the previous 50 years would need to be done by a statesmanship ungrudging and unbargaining

In Adenauer, he met a German statesman who represented a force which, in Germany, was prepared to identify itself fully with Europe. I shall make this diversion since I believe there are no two figures more deliberately misunderstood by the press of this country than are de Gaulle and Adenauer. Adenauer, in representing what was historically called the Centre Party in Germany - the Zentrumspartei - represented a tradition which began with Windhorst in opposition to Bismarck, and was continued by Bruning in opposition to Hitler. Bruning was driven out of Germany and Adenauer as an associate of Bruning was imprisoned. The Centre Party believed that Germany’s interest should be identified with Europe and not against Europe; and those forces are in the ascendency in Europe at the present time. So Schumann in Adenauer met a statesman who represents a force which in Germany was prepared to identify itself fully with Europe. Adenauer’s aim was for a Germany travelling not left, not right, but straight, with straight relationships with her neighbours.

Europe cannot live against a background of insecurity and terror. Much of the recent thinking has been dark and irrational, and this ruinous thinking has produced catastrophes unprecedented in history. It would be a woefully defective British statesmanship which ignored any attempt to establish European unity, and which failed to adopt every means in its power to buttress and underwrite the new Franco-German unity from the absence of which in the past many disasters have been forthcoming.

Mr. Heath, the Lord Privy Seal in the United Kingdom, in his speech of 17th May, said -

Tn the political sphere we see the growth of political consultation between the countries of The Six. There is regular consultation at the level of foreign ministers. There is frequent and regu lar consultation between Ministers of other kinds at other levels, and between, for example, the governors of the State banks; and proposals are being considered for more formalized consultation at the level of heads of government.

Mr. Heath continued

This is not in any way blameworthy, as is sometimes suggested. It is the perfectly natural development of the cohesion of a group such as we now see developing in Europe. From the point of view of political consultation we have consultation in Western European union, in which the Six and the United Kingdom sit. . . . This development poses for us and the rest of Europe considerable political problems. I am talking now, not only of the next six months, or the next two or three years, but of a much longer period. We can then see the danger which faces us of a decline in political influence in the world at large and in our Commonwealth.

I wish to speak briefly of the possible economic effects of Britain’s joining the European Economic Community, but before I do so, I should like to direct the attention of the House, and of the Minister for Primary Industry (Mr. Adermann) - since he referred to our trade relationship with the European Economic Community - to what our trade relationships have been with foreign powers and the United Kingdom over the last six years. The trade picture of Australia over the last six years shows that we have had a trade deficit of ?462,687,000 with the United Kingdom. We run, not counting invisibles - this is purely the commodity exchange - an average annual deficit with the United Kingdom of ?77,000,000. On those figures, if there were a disappearance of preference, the United Kingdom would have more to lose than we would; and we have alternative markets to offer to some of these other powers if the United Kingdom ceases to be our market. Our trade deficit over six years with the United Kingdom is nearly ?463,000,000, and our trade deficit with the United States over six years has been ?393,360,000, reaching the high level of ?142,000,000 with the latter country in the financial year that has just closed

On the other hand we have had a surplus with the European Economic Community - the six powers of the Economic Community - over the last six years of ?501,952,000. So, in all this astonishing discussion about the British market, when the facts are that we have had a six-year deficit of ?403,000,000 with Great Britain and a surplus of £501,000,000 over a sixyear period with the European Economic Community, it seems amazing to me that we should be approaching the loss of the British market as a sphere which is going to be such a problem for us. Over six years we have had a surplus trading balance with Japan of £530,609,000. I want to make those points because 1 do not think we need to approach the problems of selling to the European Economic Community, whether Britain is in it or out of it, in a negative way. If perhaps we are going to lose some of our preferences, and the Ottawa system is going to disappear, we must grow to a new maturity in world affairs; but in the long run I do not thinik it will be a bad thing.

What are the factors that are driving the United Kingdom into the Common Market? There is a tendency on the part of the Prime Minister (Mr. Menzies) and others to assume that Britain can stand out of it and then face the competition of this colossus unaffected, still continuing to be the market that we think it has been to us, although the last six years have shown that it has not been such a strikingly good market.

Mr Adermann:

– That is your assumption.

Mr BEAZLEY:

– You had to operate on certain assumptions; and we do not know what the tariff policy on agriculture will be.

Mr Adermann:

– It is not for you to say that that is the Government’s assumption.

Mr BEAZLEY:

– 1 can only draw inferences from what the Prime Minister has said. He seems to speak with very great regret about the possibility of the United Kingdom entering the Common Market, and a good many Cabinet statements - especially that of the Minister for Immigration (Mr. Downer) - have most forcibly suggested the same thing. I may be mistaken. I am not wishing to make a debating point; this is something above that sort of thing.

The United States has been investing very heavily - quite apart from its gifts - in the recovery of Europe. In 1950. the United States’ investment in Europe - mostly in the Common Market - amounted to 1.5 billion dollars, and the amount has now risen to 4.5 billion dollars. British investment, too, is heavily gravitating towards the European Economic Community. As mentioned by the Leader of the Opposition (Mr. Calwell) Imperial Chemical Industries now has investments in Europe amounting to £100,000,000. Mr. Heath spoke about the magnet that the European Economic Community is to investors on both sides of the Atlantic. British investors are not investing in Britain, but they are investing in the Common Market. What is the reason for this? In the first eight years of this last decade the United States invested in the United Kingdom more than half of the amount it invested in Europe, but now by far the bulk of her investment is going into the Common Market countries. Let us consider steel which was the first factor of unity in the European Economic Community. Whereas in 1953 the European Economic Community produced 43,000,000 tons of steel, this year it is estimated that it will produce 75.000,000 tons of steela tremendous increase.

What does the Common Market represent? It represents a discriminating market, and one capable of great expansion. The six Common Market countries now have a population of close on 170,000,000. In purchasing power they are a market twofifths the size of the United’ States. By 1975 their purchasing power should be as great as the present purchasing power of the United States. Recently their gross national product has been growing at almostwice the rate of that of the United States In international trade The Six have a volume of imports and exports exceeding 50 billion dollars. The emergence of a large home market in Europe will justify mass production and marketing methods formerly unknown there and thus reduce European manufacturing costs. It is a market in a strong bargaining position for a reciprocal lowering of tariffs. It is particularly strongly placed vis-a-vis Great Britain.

The Prime Minister has reminded us of how important this country is - small though its population - to the United Kingdom as a market. That is true of the past, but nations also have to deal with the future, and in point of fact the United Kingdom’s exports to the Common Market have been growing at twice the rate of her exports elsewhere. Mr. Heath has summed up the British dilemma by saying -

Until the creation of the Economic Community our trade with Europe was increasing. It amounted to 15 per cent, of our trade. During the past five years our exports to The Six have increased at nearly twice the rate of our total export trade. This trade is bound to be affected by the creating of the common tariff round the markets of The Six and the gradual abolition of their internal tariffs.

There are very great pressures on the United Kingdom and there lie before it all kinds of future industries in which it is particularly interested. It is true that within the Common Market certain British industries would disappear, but Britain believes - I think it believes rightly - that in its agriculture it has an edge of efficiency on most of its competitors. It certainly has an edge of efficiency on Germany in agriculture. I could give the figures which establish this, but I have not the time.

Mr Adermann:

– The United Kingdom is paying a subsidy of £300,000,000 to its producers.

Mr BEAZLEY:

– Yes, but whereas 23 per cent, of Germany’s labour force in agriculture is required to produce 7 per cent, of the national income, it takes only 6 per cent, of the British labour force in agriculture to produce 5 per cent, of the national income. Although the number of British agricultural labourers has declined by 25 per cent, or 170,000 in the last ten years, production has increased. I do not think that Great Britain has anything to fear from entry into competition with the peasant economies of Germany and similar nations. I do not think we can rely on the motive to defend British agriculture as being a motive to keep Great Britain from joining The Six.

But what about the British secondary industries? What is the future of supersonic aircraft? They will be important in future trade and they cannot be built by Italy, Great Britain, Germany and France, all competing with each other. They belong to a colossus with co-ordinated economies. The economies of these countries in electricity and transport are already closely coordinated. If Great Britain stands out, this very powerful unit will constitute competition for it in the affairs of the world that it may well find difficult to withstand. There are the various applications of atomic industry which can only be properly carried on by some such colossus as either the United States of America or the Soviet Union - or The Six, especially if Great Britain joins it. There are future developments, not of the distant future, of which models have already been exhibited in Sydney. There is the manufacture of hovercraft liners and so forth. There is a tremendous future of adjustment in trade which lies in all these applications of science by big manufacturing units with co-ordinated economies, such as The Six.

The pressures on Great Britain are very great. I do not think that in raw materials we can assume that Great Britain’s entering the Common Market would lead to any loss for this country, nor should we expect any loss in tropical products except sugar, which will compete with the beet sugar of Europe. We are not particularly involved in the sale of manufactured goods. Our problem is in temperate foodstuffs. I believe that in the supply of temperate foodstuffs we must look to alternative markets, and I do not think they are very difficult to see. The Minister for Primary Industry has drawn attention to the great growth of the Japanese market for Australia. Japan has set out to double its national income in a decade, and the decade began two years ago. In the first two years of the decade, Japan increased its gross national product by 18 per cent, and 11 per cent, respectively. To double its national income in the ten years, it must achieve an average increase of 7.2 per cent, per annum, and it is easily doing that. This programme involves a colossal increase in Japanese imports, and we have already felt this pull.

Policies of rehabilitation have already affected such countries as France and Italy with which we now have very great trade surpluses, and American policy has rehabilitated Japan, with which we also have a great trade surplus. As the rehabilitation process continues with some of the very low living standard countries in Asia, we will find alternative markets there, and we should certainly be looking for them. But when we consider Great Britain’s relationship with the European Economic Community, for heaven’s sake let us not think of it only in terms of trade, important though that is and though it may be augmented finally by the British position within the European Economic Community. Let us remember there is the greatest possible pressure on Great Britain, and when dominion policy in the past has attempted unrealistically to draw Great Britain out of Europe, the result has been disastrous.

Mr DAVIS:
Deakin

.- I find myself in the position of having to say to the honorable gentleman from Fremantle (Mr. Beazley), who preceded me, that I find very much in his speech with which I agree. The matters on which we differ are relatively minor. His speech is the sort of speech I think should be made in this House on issues such as this. On these issues we need calm and dispassionate judgment rather than the heat and fire evidenced by the Leader of the Opposition (Mr. Calwell). The speech of the honorable member for Fremantle, excellent as it was, did little to support the motion of no confidence moved by his Leader. It inclined more to the views of honorable members on this side of the House than to the views of his Leader.

I was appalled by the speech of the Leader of the Opposition, who did himself less than justice. Here we have one of the great issues of our day and age before us. What we can do about it is perhaps a matter for discussion, but it is a great and important problem. Yet the Leader of the Opposition, with all his knowledge, his capacity for research and his ability to put a case, said little about it. He certainly said nothing, as the Leader of an alternative government, about how his party would deal with the problem, if the responsibility rested upon it. I think the House is entitled to expect from the Leader of the alternative government some particular statement as to how his party would deal with these problems. To leave it in terms of vague generalities is to serve no purpose at all.

I would remind the House, for reasons which I hope will become apparent, of the terms of the motion passed by the House of Commons less than a fortnight ago. The motion was as follows: -

That this House supports the decision of Her Majesty’s Government to make formal application under Article 237 of the Treaty of Rome in order to initiate negotiations to see if satisfactory arrangements can be made to meet the special interests of the United Kingdom, of the Commonwealth and of the European Free Trade Association; and further accepts the undertaking of Her Majesty’s Government that no agreement affecting these special interests or involving British sovereignty will be entered into until it has been approved by this House after full consultation with other Commonwealth countries by whatever procedure they may generally agree.

In that motion are the three pillars on which all this discussion rests. The first is the power given to the Government to negotiate to see whether satisfactory arrangements can be made to meet the special interests of the United Kingdom, the Commonwealth and the European Free Trade Association. The second is that no agreement affecting these interests or involving British sovereignty will be made without the approval of the House of Commons and the third is that there shall be full consultation with other Commonwealth countries. It is quite evident, as the honorable member for Fremantle and the Minister for Primary Industry (Mr. Adermann) said, that this is not a simple issue. There are at least four parties directly concerned. They are the present members of the European Common Market, the United Kingdom, the European Free Trade Association and the nations of the Commonwealth - firstly Australia, in our view.

I detected in the remarks of the Leader of the Opposition some indecision on these matters. The fact is that one issue and one issue only has been decided - that the United Kingdom will make formal application to join the European Economic Community and will seek to obtain entry under stated conditions. Whatever we may or may not say in this House and whatever we in Australia may or may not do, we cannot alter the decision to make that application. That brings me to the point which I think underlies many of the remarks of the honorable member for Fremantle - that is, we may affect the form of the negotiations by indicating the Australian view on matters of political or economic principle and, as the Prime Minister has said, on matters of special importance to Australia.

Mr. Macmillan, in his speech to the House of Commons, dealt with some of the matters mentioned by the honorable member for Fremantle. He referred to the underlying issues as being European unity, the future of the Commonwealth and the strength of the free world. He said, in effect, “ lt is because we firmly believe that the United Kingdom has a positive part to play in their development - for they all are related - that we ask the House to approve what we are doing “.

I come now to the sort of situation which could develop and which may develop in this country. No thinking person can dispute that we cannot obtain the best of all possible worlds. Our problem is to obtain the best possible world. To do that, we must weigh very carefully the consequences of our action. They would be reflected, I take it, in the negotiations with the United Kingdom or the member countries of the European Common Market, as the case may be. I follow up the remarks of my friend from Fremantle by saying that we cannot afford to seek a short-term gain or to avoid a short-term loss if in the long term the result may be heavy loss or even disaster to us, the United Kingdom or the countries of the free world. So it is not an easy problem; it is a problem which can be obscured by being too close to a particular aspect of it.

The Prime Minister said, as I understood him, that if the United Kingdom entered the Common Market without the safeguards which it is trying to achieve, some sections of this community would be very seriously affected. I realize that it is quite foolish to expect people whose security or whose whole means of livelihood may well be affected by such an event to take the calm and dispassionate view which I believe we should take. However, the need to take a calm and dispassionate view must be recognized in this House. While we seek to secure, by advice to the United Kingdom or to the nations of the European Common Market, as the case may be, the best terms for Australia consistent with our overall responsibility, we should also consider what programme is necessary in this country to lessen the short-term impact if the United Kingdom does sign an agreement which has an adverse effect on sections of the Australian economy. We should be thinking along a number of lines. One such line is this: What action should we take, what action can we take, in a period of transition. I do not believe that even the most pessimistic person would think that, if the United Kingdom entered the Common Market, that would suddenly mean a complete break-up of the trade relations which exist between us and the United Kingdom, or between the United Kingdom and other nations of the British Commonwealth. There would be a period of transition. In that period of transition we should endeavour or prepare to make adjustments to our external trade. Those adjustments should be designed to lessen the impact on sections of the community to which the Minister for Primary Industry has already referred.

I mention briefly in passing, Sir, that we have special problems in relation to our export trade. One such problem is the total freight cost on commodities produced in Australia and exported to other countries. I think every one at one time or another has referred to what is popularly known as the Far East and which in fact is our near north. Freight rates on commodities exported to countries in that area are proportionately high. During the period of transition we may well consider action by way of paying subsidies or levying taxation, or in any other form we choose, which would have the effect of reducing the impact of heavy freight rates on commodities shipped to Asia, South America or such other markets as we may be able to exploit. The Prime Minister has mentioned the action that this Government has taken already.

I believe that we may well be required to extend our thinking on that matter. I have in mind the activities of the Export Payments Insurance Corporation. We may well have to consider extending that sort of activity to assist exporters of primary products in the first place, and also perhaps the producers of partly processed or manufactured goods. Without doing that it would be impossible for us to develop the markets that we must develop in other countries.

On the political side of this problem, I say again that I find myself very largely in accord with the views expressed by the honorable member for Fremantle. I do not propose to add to what has been said on this aspect of the matter by the speakers who have preceded me. It is enough to realize that it is a political as well as an economic problem. In the main, it may have a larger political content than any other content. In the main, it may well be that the consequences of the establishment of a strong and united Europe, whether it be by the formation of a federation or a conferederation, as the Prime Minister suggested, will affect the future of the world and will ultimately bring to Australia far more benefits than we may get by short-term insistence on the maintenance of the present order.

There have been many statements in one place and another of the possible adverse consequences to particular industries of the United Kingdom joining the Common Market. I do not think that the United Kingdom or the nations of the European Common Market could afford to take action which would have the effect of very seriously diminishing their purchases from this country. The honorable member for Fremantle put it in another way. The blunt truth is that we huy so much from the United Kingdom and from the nations of the Common Market that they just could not afford to cut off their purchases from us. We must consider the probabilities. To my mind, one probability is that, if England’s negotiations are successful, they will result in some sort of compromise - in something that will be a little worse from our viewpoint than things are at present but which certainly will be a lot better than the somewhat pessimistic view that has been adopted by my friend the Leader of the Opposition.

Finally, 1 believe we must accept the fact that we live in a world that has changed and is changing. We are part of an organization of countries, known at present as the Commonwealth of Nations, that has changed and is changing. Many of us in this House have lived through a period in which Australia was a part of the British Empire. We have lived through a period when Australia was a member of the British Commonwealth of Nations. It is now a member of the Commonwealth of Nations. To-morrow, as a result of the projected move on the part of the United Kingdom that we are discussing, Australia may become a member of the same kind of family of nations, but having a different name, and in which emphasis may be placed on rather different aspects of association. It seems to me that, above all else, we must approach this matter with a relatively open mind. We must seek the best terms that we can obtain, but in doing so we must realize that we have a larger responsibility. If we accept that larger responsibility, and if as a result of our doing so some sections of the community suffer particular disabilities, our policies should be directed towards lessening or removing those disabilities.

Mr PETERS:
Scullin

.- Mr. Deputy Speaker, this Government, as is generally admitted, cannot decided whether Britain should enter the European Common Market or not. It has, of course, no right to seek to dissuade the British Government from taking steps to join the Common Market if the winds of economic change that are blowing throughout the world demand that, for the protection of her industry and the welfare of her people, Britain enter that Common Market. However, the members of this Government have expressed great concern for the trade thai Australia will lose if Britain joins the Common Market. Let me remind the House that this same Government, during the last ten years, has succeeded in destroying an overseas market for our primary products as valuable as the present United Kingdom market.

Mr Turnbull:

– Give us some details!

Mr PETERS:

– The honorable member asks me to give the details. The honorable member for Fremantle (Mr. Beazley) pointed out that our adverse trade balance with Great Britain, over a relatively short number of years, amounted to £463,000,000, and with the United States of America to £393,000,000. Let me give some further illustrations of what has happened as a result of the ineptitude and antiAustralianism of this Government in following its trade policies during the last ten years. In the period of ten years until the end of 1960 our adverse trade balances totalled £1,400,000,000, and in this year the adverse balance has so far amounted to £396,000,000. In other words, in that tenyear period our adverse trade balances have totalled £1,800,000,000, a gigantic sum of money.

Most of that adverse trade balance has been brought about by our trade with the United Kingdom. In fact, our adverse trade balances with the United Kingdom have probably totalled more than this amount. We have experienced favorable balances of hundreds of millions of pounds with Japan and with Germany, and if our total adverse balances have amounted to £1,800,000,000, then our adverse balances with the United Kingdom and the United States of America have probably been in the vicinity of £2,500,000,000. These are immense sums of money.

What has this meant to Australia? The money represented by the adverse balances must be paid, and it can be paid in two ways. First, we can secure overseas loans. These must be paid back, and interest must be paid upon them. Secondly, we can encourage the investment of foreign capital in Australia, and upon those investments dividends have to be paid. This Government’s betrayal of the best interests of Australia, in the pursuance of its trading policies, has put us in the position in which we have to pay annually to overseas interests about £200,000,000. This means that primary products to the value of £200,000,000 go from this country every year, and for them we receive no return. In this way the Government has destroyed an overseas market for our primary products equivalent to the present United Kingdom market, as a direct result of its trading ineptitude and incapacity.

Within recent years this Government negotiated a trade treaty with Japan. Why did it do this? Japan was purchasing from Australia over £100,000,000 worth of primary products, while we were purchasing from Japan products to the value of about £26,000,000. We had a favorable balance of almost £80,000,000 a year. I remember the Minister for Trade (Mr. McEwen) standing in this chamber and saying: “ That is not fair to Japan. We have to equalize the position. We have to buy more from Japan than we have been buying in the past.” I have not heard the Minister say from his place here: “ We have been buying from Britain twice as much as Britain has been buying from us. Therefore, we have to equalize the position and Britain must buy more from us or we must buy less from her.” The same right honorable gentleman has not stood in this chamber and said, in the interests of the Australian primary producer and the Australian people generally: “ We are purchasing from the United States of America two or three times as much as that country is purchasing from us. Therefore, she will have to pur chase more from us or we will purchase less from her.” No, he does not say these things.

The difficulties that we face to-day in connexion with the Common Market are difficulties that have been created by the Government that occupies the treasury bench in this Parliament. What we should have done, of course, is what has been advocated by the Opposition in this Parliament on more than one occasion. I remember asking the Prime Minister (Mr. Menzies), as early as November, 1950, whether he considered that, in view of the fact that our overseas balances were rapidly deteriorating, and as our exports were then bringing higher prices than ever before, we should take action to preserve our overseas balances, so that we would not become a debtor nation, to a continually greater extent, in times of prosperity. The Prime Minister said that he had his eyes on the position. He had his eyes on the economic position of this country as early as 1950, yet in the days of our greatest prosperity - when we had harvests unequalled before in our history and when our primary products were fetching highest prices on the world’s markets - he allowed us to dissipate our national wealth on canned chicken legs and things of that description. We imported hundreds of millions of pounds worth of textiles at a time when such goods could have been and should have been produced in Australian factories by Australian workmen. Boots and other manufactured articles of every description were imported. To-day we reap the harvest of that ineptitude. We reap the harvest in the form of unemployment. We reap it in the form of difficulties confronting Britain which feels that she must join the Common Market in order to preserve the welfare of her people and her power as a manufacturing nation. Britain has been forced into this position because of competition from the planned economies of Communist Europe and Communist Asia, and competition from places like Japan and the United States. That is the position.

However, Britain will not cease to obtain primary products from us. How could she? We must pay Britain about £100,000.000 a year, for which we will get nothing in return. How do we pay that sum? We do not pay it in bank notes. We must pay it in commodities. If Britain will not take commodities - and the only commodities in which we can pay that sum are primary products - what will happen? I leave the answer to that question to ‘the genius of honorable members opposite. Of course Britain must accept our commodities. The situation is not as gloomy as was suggested by the Prime Minister. Our goods will still be wanted in Britain. They will still be wanted in West Germany, with which we had a favorable trading balance of tens of millions of pounds during the last few years. Our goods will still be wanted in Italy and in many other countries. Our disabilities will not arise from our inability to sell those goods. They will arise from the fact that we must send abroad a vast proportion of the national wealth produced in this community annually in order to meet debts that have been accumulated by this Government during the past ten years. That is the greatest economic problem that faces Australia; it is at the root of the dissipation of our overseas funds. That problem is at the root of the unemployment that is spreading throughout this country to-day.

We cannot overcome the problem by increasing our loans overseas. We cannot overcome the problem by following the Prime Minister’s suggestion to induce foreign capital to invest in Australia - in other words, sell our country bit by bit, its industries, its land and its property to the Shylocks of the world so that ultimately the people of Australia will become merely the hewers of wood and the drawers of water to serve the financial interests of absentee investors. That is the position that has been created by this Government. That position is not due to Britain, in her own interests, seeking to enter the Common Market - an action perhaps forced upon her by what had been termed the winds of change that are passing across the world. Britain must defend and protect the interests of her people by joining an economic confederation that will enable her to withstand the attacks of planned economies of other countries of Europe and Asia and at the same time compete successfully with capitalist countries such as America and Japan, which are daily seeking in every way to create new markets for their increasing production. The world’s production is increasing immensely. It is increasing at a rate out of all proportion to the increase in consumption, despite the fact that the world’s population is increasing yearly by 50,000;000 persons. Living standards are not being increased as they should be. That is a problem with which capitalism has so far been unable to cope, but it is a problem with which it must cope. Capitalism must distribute and cause to be utilized the commodities that are being produced in ever-increasing quantities as the result of the application of science to industry.

The honorable member for Hume (Mr. Anderson), who is interjecting, is one of the political geniuses that distinguish the Country Party in this Parliament, but so far he has remained silent on this subject. I defy the honorable member, who has been interjecting in a sneering manner for the last few minutes, to prove that the figure of 1,800,000,000 that I claimed was the amount of our overseas indebtedness is false. Interest payments on our overseas loans, which I say must be paid annually, and dividend commitments on the investments of foreign investors amount to almost £2,000,000,000 a year. Let the honorable member for Hume show me how countries can continuously and incessantly borrow increasing amounts of money every year overseas without ultimately reaching the condition of national bankruptcy which brings about a reduction in the standard of living of the people of that country.

I have no objection to Britain joining the European Economic Community. I do not believe that any Australian is entitled to voice any objection to Britain joining the community. I believe that the Government of Britain should act in the best interests of the British people. I deplore the fact that we will be forced to send to Britain and to other countries hundreds of millions of pounds worth of commodities every year for which we will get nothing in return because those commodities represent payments on money that has already been expended.

Mr. CASH (Stirling) [10.291.- I was pleased that in the last 30 seconds or so of his speech the honorable member for Scullin (Mr. Peters) referred to the European

Common Market. To-night the Prime Minister (Mr. Menzies) made a statement in connexion with the application by the United Kingdom to join the European Economic Community. We are now debating this matter following a motion that the statement be printed. The Leader of the Opposition (Mr. Calwell) has moved an amendment to the motion. In his amendment he refers, among other things, to what he alleges is the Government’s lack of foresight in this matter. 1 join issue with the Leader of the Opposition on that allegation because the Government has had this matter under close observation for some time. With the exception of the useful contribution by the honorable member for Fremantle (Mr. Beazley), all the speeches from the Opposition side of the House to-night, including that of the Leader of the Opposition, indicated an almost complete lack of knowledge of the subject. I believe that the man in the street, and particularly the people who are listening to the broadcast of these proceedings, are hopeful that some useful information can be communicated to them with respect to the European Common Market itself, the history of its formation and the reasons why it was formed. This subject has engaged the mind of the man in the street over the last few weeks, and perhaps the last few months. It has figured prominently in the press of this country for perhaps only the last six months, and certainly it has been in the mind of the Leader of the Opposition for only about the same time. I took the trouble to examine many volumes of “ Hansard “ in our party room covering the years from 1957 to the beginning of this year, and nowhere could I find a speech by any member of the Opposition on this subject. Of the many subjects proposed by the Opposition for discussion as matters of urgency - a large proportion of them have been trivial matters - not one has related to the thing which the Opposition now describes as a pressing Commonwealth and world problem - the European Common Market. Opposition members are just trying to jump on some band-wagon.

In order to understand the European Common Market, Sir, one has to look at its history and see how it was formed and why. We have to look to a man whose name has not been mentioned this evening - a man who actually envisaged the Com mon Market as becoming eventually a united states of Europe. I refer to a Frenchman who is perhaps the best known figure in Europe after Adenauer and de Gaulle. This man is Monsieur Jean Monnet, who is now a quite old man of 73. He first came into prominence during World War I., when he was a very young man. He became engaged in many interAllied organizations for the economic coordination of supplies and transport for the Allied forces. Only a few years later, he was appointed Deputy Secretary-General of the League of Nations. From that post he went on to deal with many problems concerned with the reconstruction of Europe. These included particularly the economic stabilization of Austria, Poland and Roumania, which were having a very hard time after World War I. When World War II. broke out, Monnet’s capabilities were well recognized by the Allied governments and he served on the British Supply Council and later the American War Production Committee. It was at this time that Monsieur Monnet proposed that Britain and France be united as one nation. This, of course, did not meet with approval at the time, but it was an indication that his further aim was, and still is, a united states of Europe - a Europe united both politically and economically.

In 1947, Monnet introduced a plan which was the basis for the great recovery of France after World War II. It was the real basis of that country’s industrial achievements and of its development. Not content with this, he then evolved a plan for pooling the coal and steel resources of France and Germany, and any other countries which wished to participate in the plan. This was referred to as the Schuman Plan, after Monsieur Robert Schuman, who was then Foreign Minister of France. But the plan was actually devised by Monnet himself. I can give the House some indication of this man’s great economic brain and wonderful capacity by pointing out that in 1951 he devised the plan which brought into being what we now know as the European Coal and Steel Community. It is interesting to note that the countries which entered into the agreement to form that community were Germany, France, Italy, Belgium, The Netherlands and Luxembourg. They, of course, are the countries which comprise the European Common Market. Therefore, the treaty which led to the establishment of the European Coal and Steel Community was actually the first step towards the establishment of the European Common Market as we know it to-day.

When we look at the reasons for the establishment of this organization, which is sometimes known by the initials “E.C.M. “, we have to refer back to the 1930’ s, when as we know, markets in many countries were in a state of complete stagnation. This was due to the fact that throughout the world there was discrimination against the entry of goods from other countries. There were harsh import restrictions and extremely high tariffs. This meant that each country was embarking on a policy which could be expressed in the following terms: “We will go it alone. We will get out of our troubles by ourselves.” This, of course, did not prove successful, as the depression and the incidents leading to World War II. showed. These barriers weakened trade throughout the world. After World War II., a much more far-sighted view was taken of the many problems that were to be faced in the post-war reconstruction of the world, particularly in the economic field. That is how the nations settled down to consult one another about international agreements of many kinds.

The first of these agreements of great importance was the Bretton Woods Agreement of 1944. Representatives of 44 nations met and discussed many subjects, including the need for liquid short-term funds throughout the world, the need for long-term development loans and the need for lower trade barriers between countries. They believed that the implementation of proposals designed to achieve these three objects would cause trade to grow and living standards throughout the world to rise. This, in turn, would cause more trade to flow into every country in the world.

From the Bretton Woods Agreement came two organizations which are now well known to us - the International Monetary Fund, which is often known by the initials “ I.M.F. “, and the International Bank for Reconstruction and Development, which is sometimes known by the initials “ I.B.R.D. “. A total of 68 nations subscribed to the I.M.F., and the I.B.R.D. is now concentrating on 55 projects throughout the world.

The organizing of stable trade agreements was much slower, and it was not until the General Agreement on Tariffs and Trade was finally entered into in 1947 that trade began to improve. This agreement was signed by 23 countries, and the membership has since grown to 37 countries, which conduct four-fifths of the world’s trade. This agreement provided for sound and fair conduct in trade between nations, for equitable tariff reductions, and for the discussion of trade problems by the General Agreement on Tariffs and Trade. Excessive trade restrictions between nations were forbidden.

We come then to the European Recovery Programme which came into operation as the Marshall aid plan devised by General George C. Marshall of the United States Army. That plan resulted in the formation of what we know now as the Organization for European Economic Co-operation, or the O.E.E.C, which was established in 1948. In the same year, as we know, the Benelux countries - Belgium, The Netherlands and Luxembourg - formed a customs union. That was the first customs union in Europe.

It was not until 1957 that the European Economic Community - the European Common Market - was established by the signing of the Treaty of Rome, which came into force on 1st January, 1959. This treaty provided that all tariff barriers and import restrictions would be abolished within fifteen years after the agreement was entered into. It provided also, for a common tariff wall and for a common policy on agricultural products. Only a few months after this organization was formed, the United Kingdom, which was the instigator of the European Free Trade Association, joined with Portugal, Austria, Switzerland, Denmark, Norway and Sweden in the formation of that body. Those countries, too, wanted to abolish tariffs and quantitative restrictions. They wanted fair competition between nations and they wanted the goods which were to be allowed to move freely between nations to be listed so that everybody would know what was going on. This association had no common tariff wall against the rest of the world and it provided for special arrangements with respect to agricultural products and the products of the fishing industry. In this respect, it was different from the European Common Market which provided for a common tariff wall and for tariffs on agricultural products.

If Britain joined the Common Market, its move would lead eventually to the amalgamation of The Six and The Seven, giving a trading union of thirteen states in Europe. With the addition of Greece and Turkey, which are at present associate members of the European Common Market, this would give a total market in this union of trading states of 300,000,000 people. We can readily see why Britain is interested in getting a foothold in such a market. I point out, as a matter of interest, that there is a Latin American Free Trade Association in South America, established by the Montevideo Treaty, which embraces Argentina, Brazil, Chile, Mexico, Peru and Uruguay. That indicates that trade groups are being thought of not only in Europe but also in other parts of the world.

We must remember that the European Common Market . agreement is not only a trade deal. It has other aims. The member nations agree to work together politically. They also agree on the partial standardization of social services. When we compare the social services in Great Britain with the social services in some of the European countries, we see that there definitely will have to be a good deal of co-operation in order to get the social services in those countries raised to the quality of the social services provided by the British Government. There is also to be free movement of labour and capital between all the nations. That means that a man who has worked in West Germany can just pull up his stakes, go off to Great Britain and become a resident of that country. I forget the actual details of the agreement, but I think it is possible for a man to go from West Germany to France, live there and stay in a job there for a year, then go to Great Britain, be in a job there for three years and eventually become a British citizen if he wants to do so. Of course, that would apply in reverse to a British citizen going to one of the European countries. Another aim of the Common Market is unrestricted trading in industrial products and the setting up of marketing boards to control trade.

The formation of the European Common Market is one of the most momentous events that have occurred since World War II. If the two groups - the European Economic Community and the European Free Trade Association - amalgamated it would mean the emergence of another power. That would be a fourth great power alongside the other three great powers - the United States of America, the Soviet Union and red China.

The member countries of the European Common Market first reduced their tariffs by 10 per cent. Then, following a German proposal, they reduced them by another 20 per cent., because the Germans believe that reduced protection for industry will weed out the inefficient firms all over Europe, will bring down costs and will enable the member countries of the Common Market to secure outside markets much easier. Of course, a similar set of circumstances applied in Australia in regard to the lifting of import controls last year. Many Australian manufacturers had a look at their costs of production and found that many of their goods were overpriced, and they are taking steps to remedy that position.

The two main points about the United Kingdom’s entry into the European Economic Community are, first, the United Kingdom’s preferential agreements with the Commonwealth countries, and secondly, the common agricultural policy between the United Kingdom and the countries of the Common Market. At the present time certain Australian exports are not affected. For instance, greasy wool and skin exports to the Common Market countries are not affected by the tariff changes. They are now duty free and they will continue to be so. For the present there will be no changes in the tariffs on our agricultural products because a statement from the member countries on what will be their common policy on this matter is still pending. Agricultural products are defined in the Treaty of Rome as processed foodstuffs, cereals, dairy produce, meat, sugar, fruit and other farm products. Many tariff rates for those goods are operating under the General Agreement on Tariffs and Trade. Therefore, some adjustments will be made between those tariffs and those of the Common Market countries when the final agreement is arrived at. We will find that that agreement will mean a reduction in agricultural products exported to the United Kingdom. It means that we should be able to expand our wool markets, stock feed markets, beef markets and canned fruit markets - particularly the beef and canned fruit markets. With the establishment of these trade associations and the free movement of capital and labour from one part of Europe to another, living standards should rise. An increased consumption of beef and canned fruits has always been an indication of a rise in living standards. That has been the pattern in the past and there is no reason why it should not continue to be the pattern in the years to come. Therefore, Australia may benefit in the way of increased sales of wool and stock feed because, as the countries in Europe become more highly developed and have a higher standard of living, there will be more domestication of animals, and a far greater degree of animal husbandry, which will mean that more supplies will be needed of products which Australia can supply as well as any other country in the world - that is, economically produced stock feeds.

If the United Kingdom joins the European Common Market it will mean that that country will become industrially stronger. If it does, Australia will benefit because we will be able to send to the United Kingdom a far greater amount of raw materials. The United Kingdom will need greater amounts of many of the raw materials that can only come from Australia.

I believe that the United Kingdom’s part in the formation of the European Free Trade Association has done much to strengthen her bargaining power for her entry into the Common Market. The United Kingdom is anxious to keep her commitments to the Commonwealth in regard to preferential agreements, but it is also determined that it will not be shut out of trade in Europe. That is substantiated by a statement made by a prominent United Kingdom statesman recently. He said that if the United Kingdom was out of the European Common Market for very long her economy would be weakened, she would be a diminishing market for Commonwealth goods and there would be unemployment, recession and depression in that country. Those conditions could lead, as conditions of depression and recession sometimes do, to the election of a Labour Government in the United Kingdom. That would mean that not necessarily Communists, but neutralists would constitute the Government of Great Britain. It would probably also mean that some sort of deal would be made with the Soviet Union. It would certainly mean the withdrawal of Great Britain from the North Atlantic Treaty Organization. That is substantiated by the fact that the policy of the Australian Labour Party is to withdraw Australia from the South-East Asia Treaty Organization if it has the opportunity. The policies and patterns of the British and Australian Labour Parties are quite similar.

Basically, two conclusions arise from the formation of the European Economic Community and the European Free Trade Association. First, Australia is likely to lose as a result of the formation of both trade groups insofar as tariff discrimination would help competitors in those two trade areas. Secondly, Australia is likely to gain through the economic integration, and the stimulation of economic growth in those trade areas and a demand for imports as the standard of living rises. The United Kingdom will be able to export greater amounts of manufactured goods to the member countries when she is a member of the Common Market. That will give rise to a greater demand by the United Kingdom for Australian raw materials.

I believe that, faced with this problem, Australia must look at the smaller markets of the world. We must look around and find out where we can sell our goods. We must look at little places such as Malta. Malta imports £35,000,000 worth of goods a year. Australia exports only £1,000,000 worth of products to that country annually. We should go after the markets in Asian countries. If we find that the entry of Great Britain into the European Common Market is not greatly to our disadvantage at first, in the years before it weighs heavily upon us we will be able to increase our markets by exporting an increased amount of goods to Asian countries. We could export to Fiji - there are markets there - New Caledonia, Mauritius, the South

American countries and the Middle East and Persian Gulf areas, which were mentioned by the Prime Minister in his speech to-night. Those areas import goods valued at more than £1,500,000,000 a year. Australia’s share of that market is less than 2 per cent. So we have plenty of opportunities there. Plenty of other markets are available in the world if the Common Market and the Free Trade Association affect Australia to a great degree.

Whatever happens between the United Kingdom and the European Economic Community, Australia will not go bankrupt. The Leader of the Opposition would like economic disaster to fall on this country, but the Budget presented by the Treasurer (Mr. Harold Holt) reminds us that Australia is in pretty safe hands. The British Government believes that as the experts carry on their discussions on these matters practical solutions of the Commonwealth problems will be found. One of the most encouraging developments in recent months has been the growing understanding–

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

– Order! The honorable member’s time has expired.

Mr DUTHIE:
Wilmot

.- I want to deal with this subject under three headings - first, the effect of the European Common Market revolution on Europe; secondly, the United Kingdom’s role in it; and finally, the effect on Australia. France, Italy, West Germany, Belgium, the Netherlands and Luxembourg, the countries which form the European Common Market, agreed in what is called the Treaty of Rome on four major objectives. They are: First, steadily to eliminate tariffs among themselves and to move towards a common external tariff against non-members; secondly, to adopt a common agricultural policy; thirdly, to “ harmonize “ a great range of economic policies covering, for example, employment, migration of workers, investment and transport; and fourthly, to associate overseas territories, past and present colonies of members, as members of the organization but with certain special privileges. That is the powerful four-square programme that they have mapped out for themselves and are in the process of bringing into being gradually. The item that is causing and will cause the greatest difficulty is the one relating to a common agricultural policy.

In general terms, I believe this concept of a common market to be the emergence of a new economic, political and ethnic climaie in Europe. It is a new spirit arising there out of the ashes of war, and the hatreds, suspicions, nationalisms, terrors and intrigues of the centuries.It is the growth of sanity out of insanity. It is the end of jungle war in trade and economics in those six central European countries later extending to The Seven. It is the burying of the hatchet in a very real way because I feel that the strength of the economic unity between these thirteen countries has diminished greatly any likelihood of war in the future between them while this Common Market exists. It has almost wiped out the possibility of war between those countries and will have the same effect on others that can be brought into the organization, because the greater their common interest the less likelihood there is of war between them.

This great experiment will decide the economic fate and perhaps the political and military characteristics of Europe for years to come. It is the greatest economic revolution since the Industrial Revolution of the early 19th century. The Common Market represents the crashing of national and tariff walls and is an example to other parts of the world, particularly the Asian area. It is an amazing victory for cooperation and tolerance and, as other speakers have said, it could lead to an economic and political federation of Europe. It could lead also to a common currency and to common industrial standards.

What, briefly, is the motive behind the Common Market? The overall motive of countries for coming together in this tight economic union may be stated as economic survival, economic unity whioh gives greater strength, economic togetherness and economic partnership of a very real nature. That is my summing up of the significance of the Common Market to Europe which is its home.

What is the significance of the Common Market for the United Kingdom? I should like to read from the United Kingdom Information Service bulletin of 9th August. 1961, the resolution of the United Kingdom House of Commons which was approved on 3rd August, 1961, by 313 votes to 5. The resolution which, I think, has not been quoted by any honorable member tonight, is in these terms -

That this House supports the decision of Her Majesty’s Government to make formal application under Article 237 of the Treaty of Rome in order to initiate negotiations to see if satisfactory arrangements can be made to meet the special interests of the United Kingdom, of the Commonwealth and of the European Free Trade Association; and further accepts the undertaking of Her Majesty’s Government that no agreement affecting these special interests or involving British sovereignty will be entered into until it has been approved by this House after full consultation with other Commonwealth countries by whatever procedure they may generally agree.

That is the full text of this historic resolution; the like of it probably has never been passed in the history of the House of Commons.

The United Kingdom has had to face up to the problem of whether it should remain in a kind of economic vacuum and in economic isolation or whether it should join a European economic organization. Thi United Kingdom cannot ignore the massive nature of this Common Market which will involve thirteen countries with a population of about 220,000,000 people. The United Kingdom’s neighbours are only a few miles away from it, the distance from Melbourne to Sydney being about the same as the distance from London to Berlin. So this great part of Europe is packed within a relatively small area. In reality, the member countries of the Common Market are Britain’s next-door neighbours. But I believe also that the United Kingdom Government has been subjected to great pressure from private industry which has been clamouring for survival, let alone progress, and this pressure has had a great influence on the Government’s decision.

Just as Australia in World War II. had to move into the American orbit as a matter of grim, inexorable military necessity, so now the United Kingdom, through economic necessity, has to move into the European orbit and out of the Commonwealth orbit. But the United Kingdom cannot abandon her traditional Commonwealth markets, including Australia, where so many of her industrial goods find a ready market. Her purchase of some Australian products has been declining - disastrously for us - and the United Kingdom cannot afford to allow this decline to continue indefinitely. I believe that our traditional ties with Great Britain will engender in her a desire to protect Australia in that regard.

The time that has been allowed for this debate is limited, so I shall hurry now to the second objective of the Common Market and its effect on Australia. About 80 per cent, of our exports come from primary industry so naturally we are deeply concerned with what will result from the Common Market decision relating to agricultural products. This is the item that concerns us most. We can be injured gravely unless guarantees are given to protect our markets. The key factor, then, is the level of prices proposed for agricultural commodities within the European Common Market. The basis of the organization’s common agricultural policy is a system of common support to protect prices against imports by a sliding scale of tariffs and, if necessary, by direct import restrictions. Australia, therefore, must insist that these prices be fixed at the lower end of the production cost range for each commodity. Upon the common level of agricultural commodity prices eventually fixed within the Common Market depends Australia’s chances, first, of retaining its market in Great Britain for agricultural exports, if Britain joins the organization, and secondly, of ensuring a market for food exports among the existing members of the European Economic Community. There is a great range of prices for agricultural commodities among the individual Common Market members and this, to my mind, is vital to Australia. As an example, the price of wheat varies from 16s. lid. Australian per bushel in France to 24s. 9d. in Germany and 27s. lOd. in Luxemburg. The danger to Australia is that in fixing the common price level for each commodity the European Economic Community may shift the lower prices up towards the higher, rather than the other way around, and if this happens the lower price countries will be stimulated by the higher common price levels agreed upon. This would inevitably mean an increase in the production of foodstuffs in Europe. This will mean that the surplus of the continent, along with its own expanded agricultural production, will soak up the existing market for the primary products of Australia. That is how we could be affected.

Sir John Crawford, in an article headed “What Price Would Australia Pay for Britain’s Entry? “ in “ The Sydney Morning Herald” of Wednesday, 5th July, 1961, had this to say on the agricultural aspects of the proposal -

Two cardinal points about the common agricultural policy need to be stressed. The first is that the Six propose a system of “ managed “ agriculture, which I can only describe as no less and probably more protective than before the Common Market. It is a system of guaranteed farm prices paid by the consumer and supported in key cases, like wheat, by sliding-scale tariffs and, if necessary, by direct import restrictions.

The article states further -

The second point is that if Britain joins she may have to adopt this system, too. Britain protects her agriculture, but by subsidies. Produce is sold in free market terms and deficiency payments make the market returns up to guaranteed levels. On balance it would seem that if Britain adopts the European system, her farmers (except perhaps in horticulture) will be better off.

I have read that portion of the article briefly, and come now to another section of it. Here Sir John Crawford says -

However, the most dangerous prospect is that Britain, as a Common Market member, would be obliged to take wheat and dairy produce from members in Europe under conditions that virtually debar competition from Australia (and Argentina) and New Zealand in soft wheat and butter. Our market could be reduced to a residual; what Common Market members cannot supply, we can supply in competition with other non-members. This would be a reversal of preference with a vengeance.

It is true that Australia’s interests in Europe can be exaggerated. Wool is not affected and minerals not seriously. However, the rest of our exports - wheat, meat, dairy produce, fruit - amount to about £50,000,000 a year. If the same commodities, plus sugar sold to the United Kingdom - about £160,000,000 a year - are also affected, the real interest of Australia in the terms of the United Kingdom’s entry to the Common Market becomes very evident indeed.

Sir John Crawford has given a study of the question in the statements I have quoted, and there is no doubt that until we know what the terms of the cost structure are to be for agricultural products within the Common Market countries and with Britain, we will not know for sure what will be the effect on our agriculture. But we know that, if the position is not watched closely, we can be crowded out of Europe and may even have to sell less to Britain. As other speakers have suggested, this will push us into other fields in order to find markets for our agricultural products. It will mean, also, a challenge to Asian countries, much more backward agriculturally and economically, and more split up politically than European countries are. We are Asian. We are, geographically, in the Asian orbit, and we may have to become the leader of what we might term an Asian common market to offset our trade losses in Europe and the United Kingdom. This would be a long haul for Australia. Because of the low economic standards of Asian countries we would in many cases have to help build up their standards through the Colombo Plan and1 other financial aid measures so that they could become worth-while purchasers of Australian produce.

It is easy to talk about Asia taking our food products, but we have first to teach them to eat those products. The people of rice-growing countries will not readily switch to eating bread, for instance, and they are not used to eating fruit. They will have to be taught to eat bread. Thank goodness Japan is now slowly but surely becoming a bread-eating country. We may have a better chance to sell the Asian countries our dairy products than our fresh fruit, dried fruits, canned fruits and so on. This will mean not only finding new markets in Asia but first teaching the Asians to eat the food we produce. It may mean that our first campaign in Asia will have to be, not a wine-tasting campaign, but a foodtasting campaign. We have to put our primary products into the hands of the Asian people and teach them to eat those products. How much meat, for instance, do Asians eat? Very little indeed! So it will be a long haul before Australia can get into Asia in a worthwhile way economically and before Asia will become a big purchaser of Australian foodstuffs - but it will have to be undertaken. However, I very much doubt whether this Government has the competence or capacity to do such a thing, and the sooner we have a change of government in Canberra the better it will be for everybody in this country and for the future of our markets for agricultural products.

I appreciate what the Government has done in one respect, and I refer to the trade ship. That was a brilliant idea, and has gained Australia many sales of agricultural products in particular. We must have economic protection, economic guarantees and market guarantees for our products, or there will be a disastrous erosion of our overseas balances and a grave decline in our agricultural standards and our standard of living. This would be critical for the whole Australian economy, so this is a matter we cannot joke about and about which we are all concerned, whatever our party affiliations.

I support the amendment moved by the Leader of the Opposition because, as I said before, I feel that the sands of time are running out for this Government. It has failed Australia in many aspects of this important matter. It is largely a non-party matter, because we are all concerned about the welfare of our country, but it is also now a question of judging which kind of government can better carry out the great task that faces this country. I say without hesitation that only a Labour government can carry out this task satisfactorily.

Debate (on motion by Mr. Brimblecombe) adjourned.

page 165

ADJOURNMENT

Tobacco - Wool

Motion (by Mr. Hasluck) proposed -

That the House do now adjourn.

Mr CAIRNS:
Yarra

.- The House will be aware that in recent weeks a serious crisis has occurred in the disposal of tobacco leaf in Australia, and that this is having very adverse effects on many small growers in Victoria, which will also extend, in the next few weeks, to Western Australia. Problems also exist in Brisbane. At the Brisbane sales about 4,100,000 lb. of tobacco leaf was offered for sale and about one-fifth of that leaf remained unsold. In Melbourne, the sales have just been completed. About 6,500,000 lb. of tobacco leaf was offered for sale and over onethird of that leaf remained unsold. In Brisbane, the fall in the average price was about 15 per cent, or 16 per cent., and in Melbourne the fall in the average price of the leaf actually sold was over 20 per cent.

In Victoria, these circumstances have left about 400 small growers - family growers - in such a position that if something is not done for them in the next few weeks they will go broke completely. They will lose their assets in land and equipment. What is more, many loans by a number of private banks to these growers will be substantially lost, too. If the first point does not influence the authorities, the second one should.

In addition to these losses which these families are bound to suffer, between 1,000 tons and 1,500 tons of tobacco leaf, a substantial proportion of which might be useful in normal circumstances, will be wasted; it probably will be destroyed.I am not concerned, in the few minutes at my disposal this evening, to discuss what might be done for the future stabilization of the industry. I am concerned, here, with a plea and a demand that something be done to assist the growers, who have suffered through no fault of their own in recent months. I do not care whether the leaf they have grown is useful or not. These people, through no fault of their own. were encouraged to enter the growing of tobacco. Through no fault of their own their leaf remains unsold and the whole of their savings are in jeopardy as a result. My plea and demand this evening is for human beings, not for tobacco leaf. What happens in the future with regard to tobacco leaf in this country. I am not concerned about at the moment. But I am concerned about what will happen to the people who at present stand in danger of serious and severe loss. The cause of this situation, briefly, can be seen in the fact that there has been over-production and over-expansion in the industry. I say without fear of contradiction that the over-expansion in Victoria has been encouraged by the Victorian Tobacco Growers Association. For reason that are only too obvious, representatives of the association told small growers, who came into the industry and did not know the circumstances completely, that whatever could be grown could be sold.

The Commonwealth Government has a responsibility in relation to this matter. On 16th July, 1952, the present Minister for Trade (Mr. McEwen) who was then Minister for Commerce and Agriculture, said that it was planned to increase tobacco acreage in Australia from 6,000 acres to 16,000 acres in the following five years. But in those five years the acreage increased from 8,000 to 30,000 acres. If that is the kind of planning that the Commonwealth Government carries out it should accept the responsibility for the results of its planning.

Mr Adermann:

– Control of this matter is in the hands of the State Governments.

Mr CAIRNS:

– The Commonwealth Government could do something about it. It is no good passing the buck continually to the State Governments. The Government’s spokesman announced in 1952 that this plan would be carried out. If the Government cannot carry out a plan why does it put it forward? Actually, the Government has no effective plan for the tobacco industry. It is no good saying that the responsibility is on the State Governments. Substantially, it is on the Commonwealth Government. I am not discussing what is going to be done about stabilizing the industry. I want to know what can be done for the men who are suffering to-day. Honorable members opposite can call that party politics if they wish. It makes no difference to me.

The people concerned have taken certain action in this matter themselves. Some time ago, a meeting of growers was held at Wangaratta and their association was asked to put certain proposals to the Government. Six weeks later, on 7th August, another meeting was held at Wangaratta. There, 600 growers unanimously passed a vote of no confidence in the executive of their association because they had seen no results in those six weeks. Yesterday, in this House, I asked the Minister for Trade what had happened. He replied -

The position is that certain representatives of the Australian Tobacco Growers’ Council from Victoria waited on me here in Canberra and made certain representations, maybe a fortnight ago.

On the same day, the Minister for Customs and Excise (Senator Henty) was asked the same question in another place. He replied -

At this point of time,I am not aware of the submission of any proposals to the Government by the tobacco-growers.

One Minister in this House said that proposals had been submitted to the Government, another Minister in another House said that he was not aware of any proposals. Is that another example of the way in which the Government plans its business? I want to know who has put proposals, if any, to the Government on this matter. Who has been responsible? Who has appeared here in deputations? Who has put the proposals and what are they? Further, I want to know what the Government proposes to do. Is it merely going to allow overproduction to force these 400 people off the land, destroy their savings and assets, and restore stability to the industry in that way? Is the Government going to rely on the ordinary free enterprise method of producing stability or will it take some other action? I ask the Government, without any delay or equivocation, to tell positively the House and the people concerned - the people in the tobacco-growing industry with whom it has been dealing. What proposals have been put by those people and what does the Government propose to do to assist tobacco-growers who have suffered this crisis in recent months?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I thank the Minister for Primary Industry (Mr. Adermann) for allowing me to speak before him. I understand that he will answer the honorable member for Yarra (Mr. Cairns) more than adequately in a few moments. I want to speak about the proposed wool sales at Portland and about the efforts on behalf of the National Council of Wool Selling Brokers and, to some extent, the Australian Council of Wool Buyers, to prevent the sales from taking place.

Briefly, to let the House know the history of what has happened in the last eighteen months, the Commonwealth sold the wool store constructed at Portland during the war, but never used for its original purpose, to a wool-growers co-operative whose intention was to organize itself as a selling agency. The wool-growers co-operative leased the store to a company backed by the Committee of London Wool Brokers which is registered in Portland as the Portland Wool Brokers Proprietary Limited. This company has the full knowledge and experience necessary for holding successful sales. It is planned to hold sales this spring and it is my belief that successful sales will be held no matter what the official brokers’ and buyers’ organization may do.

The next step was taken on 26th January when Mr. Scott, who is chairman of the sub-committee on outside markets of the Victorian and South Australian Wool Buyers Association, wrote to the Woolgrowers Co-operative Limited and asked certain questions including the following: -

Will the Portland selling organization seek affiliation with the National Council of Wool Selling Brokers? Will the Portland organization abide by the wool-selling rules and regulations currently recognized by the national and local organizations of selling brokers and buyers? In any case, will offerings at Portland be integrated with the Australia-wide selling roster? Is there an assurance from the Overseas Shipping Representatives Association that wool from Portland sales can be shipped within the usual “ prompt “ to- U.K.., Italy, France, Belgium, Germany, Baltic Ports? Will a proper bulk-classing and reclassing organization function in association with the selling agency? How many wool sale rooms of the usual pattern are proposed for the initial season?

He asked various other questions to make sure that proper arrangements would be available at Portland. Those questions were all answered to the satisfaction of that particular committee.

About the same time, Portland Wool Brokers Proprietary Limited wrote to the National Council of Wool Selling Brokers of Australia asking for two things. They were membership of the council and sale dates within the orderly arrangement of sales throughout Australia. Both requests were refused, the first on the ground that the new company was ineligible for membership under the constitution of the council and the second on the ground that sales at Portland would interrupt the even flow of wool to the world market. Portland Wool Brokers Proprietary Limited pointed out that if this move was carried through they would be forced to act unilaterally and this would cause much greater dislocation than would their acceptance into the proper arrangement of sales throughout Australia. On those grounds, Portland Wool Brokers Limited asked for a re-consideration of their two requests at a later date. This re-consideration was given to the requests in July. The chairman of the National Council of Wool Selling Brokers then took over the correspondence and finally refused both requests on the ground that existing facilities were adequate. His letter to Portland Wool Brokers Limited did not take into account the expressed and obvious wishes of a great number of the wool-growers of western Victoria and, I believe, the southeast of South Australia, nor did it take into account the great saving in transport costs that would result from holding sales at Portland. The direct saving to growers from having the sales at Portland could be up to £1 a bale, and this could be well worth having because such a saving would be approximately double the amount of the wool levy that this House authorized this afternoon.

The third chapter in this move was taken when the chairman of the Australian Council of Wool Buyers, Mr. P. L. Lempriere took over the correspondence from Mr. Scott of the Victorian and South Australian wool-buyers associations, and, judging from the tenor of the letters I have seen, it is obvious that Mr. Scott might well have been ticked off for sticking his oar in where it was not wanted and starting off negotiations and discussions which, in terms of later correspondence, he himself admits he had no right to start. The chairman of the Australian Council of Wool Buyers wrote an extraordinary letter. I shall quote some of it. Amongst other things, he said -

The responsibility and prerogative as it affects the opening of new markets on behalf of the Australian wool buying trade is entirely the concern of the Australian Council of Wool Buyers.

He went on to say -

We therefore believe that the opening of any further markets should not be considered until the existing major markets’ facilities have been completely saturated, and that any future markets should be established at the seaboard where complete overseas shipping facilities would be available.

His final sentence was to the effect that there would be no further correspondence on this subject unless it was initiated through the National Council of Wool Selling Brokers. He knew that was impossible because the National Council of Wool Selling Brokers had already refused membership to Portland Wool Brokers Limited. That letter from the chairman of the Australian Council of Wool Buyers is an interesting one because its writer seems to take the view that the growers should have no say in where their wool is sold, that the wool does not belong to the growers and that the buyers alone will decide where sales shall be held. To say that new markets will not be considered until existing market facilities have been completely saturated is clearly absolute nonsense because, if they are completely saturated, not one more bale of wool can be sold in those markets. The writer also suggests that Portland has not adequate shipping facilities at the moment. I emphasize that Portland has the best shipping facilities on the Australian coast, it has the best wharf record and the turn round of ships there is the cheapest of any port on the Australian coast. I hope that the attitude of the chairman of the Australian Council of Wool Buyers will not be followed by the great majority of buyers and brokers.

The real reason why the National Council of Wool Selling Brokers has refused registration to Portland Wool Brokers Limited and why it has refused sale dates is that Portland Wool Brokers Limited is a new company seeking some share of the market. It is quite clear that the well-established firms object to the newcomer and are using their privileged position to prevent the new sales from becoming a success. Sales at Portland are clearly in the interests of decentralization in Victoria and in the national interest. By conducting sales there, transport costs would be reduced greatly. Sales there would also establish Portland as a real commercial and industrial centre, and it is my belief that the national interest will prevail. It must be made to prevail. I believe that there are four things which can be done to see that this is brought about. First, the growers must show great determination in sending good wool to Portland. Already a large number of growers have done this. If a good quantity of good wool is offered at Portland, the buyers will come to buy it. Secondly, State-wide grower organizations such as the Wool and Wheat Producers Association, the graziers’ organization, and the Australian Primary Producers Union should be approached to support sales at Portland. Thirdly, evidence should be given before the Wool Marketing Committee of Inquiry. Indeed, I believe this evidence should be given for the very reason that the buyers’ organizations have already given evidence opposing the opening of new sales. That evidence should be contradicted by the Portland company. Fourthly, as the House may have gathered from a question I asked the AttorneyGeneral (Sir Garfield Barwick), the position has been brought to the notice of the Attorney-General with a view to ascertaining whether the actions of the National Council of Wool Selling Brokers or the Australian councils of wool buyers in any of their forms have contravened the existing law or constitute a field of investigation for the proposed restrictive trade practices which, it is well known, .the Commonwealth Government has been examining. These and other things must be done to ensure that sales in the coming spring are a success because this is something at which you do not necessarily get a second shot. If you fail the first time, the growers might be reluctant to try it a second time. It is my confident belief that, with the support of the growers some of the best wools in Victoria will be offered for sale at Portland, lt is also my belief, that, no matter what the official buyers’ organizations or the official brokers’ organizations might do on a national level, sufficient buyers will turn up to make sales at Portland a success, ft should be noted that the shipping from Portland is more efficient than shipping from any other port in Australia. For that reason, the ships do not mind going into Portland for a relatively small quantity of wool.

Mr POLLARD:
Lalor

.- I have been very interested in the speech just delivered by the honorable member for Wannon (Mr. Malcolm Fraser), for it refreshes my memory. It brings back to mind the fact that in 1946 or in 1947 I, as Minister for Commerce and Agriculture under the Chifley administration, insisted on the building of the wool selling stores at the port of Portand in the western district of Victoria. And there was every justification for the establishment of facilities at that port. But the wool buyers of Australia, through their powerful organizations, which I believe were supported by the wool broking organizations, were determined that they would not use the facilities provided at Portland under any circumstances. Subsequently, the Commonwealth Government utilized those stores for the storage of gun cotton and for other Commonwealth purposes. Later still, both Labour and Liberal governments in Victoria expended vast sums of money on the port of Portland. That port taps the most prolific woolproducing area in Australia. Eventually, the Commonwealth Government intimated to local interests that as it no longer had any use for the Portland wool stores, it was prepared to make them available to cooperative enterprise for the holding of wool sales. Now we have the extraordinary situation that the co-operative organization of woolgrowers in the Portland district, having acquired the stores from the Commonwealth Government, is confronted with a boycott by the wool-buyers and the wool-brokers of Australia. They are boycotting facilities for the conduct of wool sales at Portland and for the shipment of wool from that port.

The honorable member for Wannon, who represents the district, is now condemning the buyers and the brokers. He has put up a case for the exercise of Commonwealth law - if such a law exists - for the prevention of restrictive trade practices. From time to time previously the honorable member has expounded in this Parliament the theory of the law of supply and demand and has referred to the necessity for non-interference with the wool-buyers and the wool-brokers. Now he is appealing to the Parliament and the Government to take action to ensure that the wool-buyers and the brokers use the facilities at Portland for the conduct of wool sales there. Without any reservation whatever, the honorable member for Wannon has advocated the utilization of State or Commonwealth law to compel the woolbuyers and the brokers to use those facilities.

I do not disagree with him; I simply point out his inconsistency. It has always been my ardent wish that decentralization should proceed throughout Australia and particularly that we should use suitable ports where the necessary facilities are available. I have never hesitated to assist the woolgrowers with that objective in view. In Western Australia in 1948, the wool-buyers and the wool-brokers jacked up and refused to use the facilities that had been established at the port of Albany. As Minister for Commerce and Agriculture at that time, I utilized the powers of the Commonwealth and co-opted its competent officers in an endeavour to coerce the wool-buyers and the wool-brokers into utilizing the facilities which had been established there by the Commonwealth at great cost.

I sent officers of the Department of Commerce and Agriculture to Western Australia to canvass the wool-growers of southwestern Western Australia for their cooperation. I asked the growers to consign their wool direct to London for sale there rather than sell it in Western Australia. That was done in an endeavour to break the control of the wool-buyers and the wool-brokers, who determined where they would buy and where they would establish wool-selling centres in Australia. Fortunately, when the brokers and the buyers in Western Australia realized that the Commonwealth Government was in earnest, they came to heel. Rather than see the wool-growers of Western Australia send their wool direct to London for sale there, they eventually agreed to wool sales being held at Albany.

I suggest to the honorable member for Wannon that he ask the Commonwealth Government to send its officers to the electorate of Wannon to canvass the woolgrowers there - who grow the best wool in Australia - and encourage them to break the ban of the wool-buyers, who always have depressed the price of wool in Australia. He should try to break the power of the wool-brokers and encourage the woolgrowers of the Wannon electorate to consign their wool to London for sale there rather than in Australia. By encouraging that course, he might eventually bring the wool-buyers and the wool-brokers to heel and thereby assist decentralization in that area.

It is a suggestion I throw out to the honorable member. He has had a lot to say about the law of supply and demand; but the law of coercion, the law of organized marketing and the power of the producers of Australia could prevail eventually over those who have endeavoured to exploit the producers of this great country. I leave it at that.

Now I want to say a few words in support of the honorable member for Yarra (Mr. Cairns) regarding the tobacco-growers of Victoria and other States, who find themselves in a most difficult situation. The honorable member for Yarra is to be commended. He has no electoral interest whatever in the tobacco-growers of Victoria and nor, for that matter, have I, but we have an interest in the rights, the livelihood and the economic conditions of these people.

Mr Duthie:

– In whose electorate are the tobacco-growers?

Mr POLLARD:

-I think they are in the electorate of the honorable member for Indi (Mr. Holten), and 1 believe he will agree with me. The tobacco-growers find themselves in an indivious position. The tobacco manufacturers of Australia are a most powerful combine. From long experience in State and Commonwealth parliaments, I know that ever and anon, with the power at their disposal, they have opposed the growing of tobacco in Australia. They have never hesitated to exercise their economic strength against the production of Australian leaf.

Mr SPEAKER (Hon John McLeay:
BOOTHBY, SOUTH AUSTRALIA

Order! The honorable member’s time has expired.

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– Naturally, I have an interest in the issues that have been raised concerning the tobaccogrowindustry and I take this opportunity of replying to the statements that have been made by honorable members. Obviously, there is a problem associated with the industry. When the honorable member for Yarra (Mr. Cairns) was speaking, I said by way of interjection that production was the responsibility of the States. I was not seeking to pass the buck on any issue; I was merely stating a fact. That is correct so far as the production of tobacco leaf is concerned.

I do want to say, however, that the prosperity that the tobacco industry has enjoyed - excluding this year, if you like - has been brought about by the very hard work of the Minister for Trade (Mr. McEwen). The beneficial results that have been achieved by the selling system and the policy of requiring the inclusion of a certain proportion of Australian leaf in Australian tobacco manufactures have been largely brought about by the Minister for

Trade. But the growers themselves chose the auction system, and they decided on continued expansion of the industry.

I am not out to assess blame but to state facts. The growers themselves are responsible for the increased production. Indeed, production has increased by 50 per cent, each year in the last three years. The position has reached such a stage that if production increases by 50 per cent, next year and again in the following year we will be producing 108 per cent, of Australia’s requirements! That obviously would bring about a chaotic condition.

The Commonwealth Government is associated with this matter because it grants concessional rates of duty provided the manufacturers purchase each year the percentage of leaf fixed by the Department of Customs and Excise. This year the figure was increased from 35 per cent, to 43 per cent., the greatest increase there has ever been from one year to another. The tobacco manufacturers contend that the increase was too great.

Recently, the six State Ministers for Agriculture were with me in Adelaide at a meeting of the Australian Agricultural Council. I arranged for growers’ representatives to meet us there, and we also met the manufacturers’ representatives and had certain discussions. A few weeks later we had a conference with growers in Canberra and met the manufacturers again. The dissatisfaction expressed at these meetings prompted the Government to take action and a committee was appointed to investigate unsold tobacco or tobacco for which no bid had been made. That committee is making its investigations at the present time. Its members are technical officers of the manufacturers, officers of the State departments concerned, officers of the Department of Primary Industry and the Department of Customs and Excise and the growers’ own assessor.

It is too soon to assess the results of the inquiry, but I can say that the unanimous decision of the committee - which includes the growers’ assessor - is that over 33 per cent, of the leaf can be classed as unusable.

Mr Cairns:

– The percentage is even higher than that.

Mr ADERMANN:

– In certain instances it is up to 50 per cent. Production has increased greatly, but perhaps not enough care has been taken in respect of quality or leaf has been grown on unsuitable soil.

Mr Cairns:

– That is not disputed, but what is going to happen about it?

Mr ADERMANN:

– The honorable member has made the point the manufacturers are paying a lower average price. If a sale is made what can the Commonwealth Government do about it? We are not a socialist government which dictates that a certain price has to be paid.

Mr Cairns:

– You are not even a humane government!

Mr ADERMANN:

– That is another matter. Who is going to force anybody to pay a certain price if it does not suit him to pay that price?

Mr Cairns:

– I am not asking for that.

Mr ADERMANN:

– The honorable member did suggest it.

Mr Cairns:

– I want to know what the Government is going to do.

Mr ADERMANN:

– The honorable member has been attending meetings and speaking at them without knowing the facts whereas the Government has been working. The honorable member for Indi (Mr. Holten) knows this better than anybody else because he has kept in touch with me almost daily. On the humane side he has induced the Rural Finance Corporation to send its representative to see what financial help can be given. That officer is at present working in the district and has been achieving results as far as he, as a representative of the corporation, can get results.

Mr Cairns:

– I do not care who gets the results as long as results are obtained.

Mr ADERMANN:

– The point I make is that it is still too early to know the results of the investigation that is at present taking place. The honorable member asked about the report of the meeting. The meeting that he attended was not called by an official organization in the industry.

Mr Cairns:

– That may be so, but there were 600 growers present.

Mr ADERMANN:

– I am informed that the hall in which the meeting was held would not hold more than 300, but that is another matter. I am not arguing about it. I will concede that there was a big representation of the industry present.

I have not received the report of that meeting, but a delegation did meet the Minister for Trade (Mr. McEwen) yesterday afternoon. I was busy with legislation at the time, but I did meet the delegation afterwards. In fact, three Ministers met it. As a result, officers of my department have been allotted to assist the delegation to make its case. That is where the matter stands at present. We are awaiting the report of the committee. There is no aspect of this matter with which we are not in constant touch.

Wherever the fault lies, and there is fault - whether it is that the growers have been led into producing in excess of their capabilities, or whether they have been taking too much for granted - that does not help the fellow who is at present in trouble. Although it is not the responsibility of the Government, that does not exclude the Government from accepting some responsibility in the issue. The Government did fix the figure of 43 per cent. The manufacturers complained that it was too high. I have made a statement to the effect that the Government will not retreat from that position. If there is any suggestion that to do so would weaken the position of the growers, I assure honorable members that the Government will not retreat from the decision it has made.

Mr Pollard:

– The trouble is that the percentage is inadequate to absorb the amount of leaf that is available.

Mr ADERMANN:

– On evidence submitted to the committee, the position seems to be that if the manufacturers bought all the usable leaf they would be hard put to make up the 43 per cent. The 43 per cent, allows for a 10 per cent, rejection overall. I understand that from the mathematical stand-point the percentage works out at 47.78 per cent. In order to meet the 47.78 per cent, standard, there would have to be a 100 per cent, compulsory sale, but no one can suggest that there should not be some rejection allowed.

Mr Cairns:

– A 10 per cent, rejection would be satisfactory.

Mr ADERMANN:

-I suggest, therefore, that the Commonwealth fixation of the percentage is satisfactory. The Government has intimated to manufacturers that it does not expect them to buy unusable leaf, but it does expect them to buy up usable leaf.

Mr SPEAKER:

– Order! The Minister’s time has expired.

Mr DRUMMOND:
New England

– I have listened to the debate initiated by the honorable member for Wannon (Mr. Malcolm Fraser), who was followedbythehonorablememberfor Lalor (Mr. Pollard). The honorable member for Wannon posed the proposition that the only resource the growers had was to approach the Government. On the other hand, the honorable member for Lalor has said that as a Federal Minister vested with war-time powers he had been able to deal with such a situation. I have risen merely to point out that wool-growers have in their hands a means of redress if they use the powers available to them. I cite a case in point.

A move was made in the city of Newcastle for the decentralization of wool selling by a company which found its main strength in the north and north-west of New South Wales. The company was boycotted. The two men who led the fight in the graziers’ organization and the wool council were Phillip Wright, of Wallamumbi, Armidale, and Colonel White, of Bald Blair. The names of those two men are honoured because of their fight. They won out as the result of getting the support of their organizations, and to-day practically every wool firm of any standing has its own warehouses in Newcastle. The objection of the people in the north to having their wool carried 100 miles unnecessarily to Sydney has been fully substantiated by the results of very successful sales at Newcastle. I suggest that the honorable member for Wannon say to his friends, “ Go thou and do likewise “.

Question resolved in the affirmative.

House adjourned at 11.51 p.m.

page 172

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Phenacetin Medicines.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– The answers to the honorable member’s questions are as follows: -

  1. I have been informed that in Sweden pills and powders containing phenacetin may now only be sold on medical prescription.
  2. This course of action has no doubt been taken because there is evidence that the excessive and habitual use of phenacetin is associated with and may be responsible for chronic inflammatory conditions of the kidney. The toxic influence may however be an impurity in the phenacetin.
  3. Yes.
  4. This is a matter for the authorities administering the poisons legislation in the several States.

Wheat

Mr Swartz:

z asked the Minister in Charge of the Commonwealth Scientific and Industrial Research Organization, upon notice -

  1. Is the Commonwealth Scientific and Industrial Research Organization experimenting with a new type of wheat silo to assist in the eradication of weevils and other pests from stored wheat?
  2. Is any information yet available to indicate whether this type of silo will be successful?
Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– The answers to the honorable member’s questions are as follows: -

  1. An experimental silo is at present being built for C.S.I.R.O. at Cunningar, New South Wales. The silo is designed to store wheat under airtight conditions, the principle being that any weevils present in the grain will use up the oxygen In the air enclosed with the wheat and asphyxiate themselves.
  2. Since the silo is still under construction, it has not been possible to carry out experimental work with it to . indicate whether it will be successful.

Native Members of the Forces Benefits Act.

Mr Whitlam:

m asked the Minister for Repatriation, upon notice -

When does he expect to authorize the proclamation of the Native Members of the Forces Benefits Act 1957?

Mr Osborne:
Minister for Repatriation · EVANS, NEW SOUTH WALES · LP

– The answer to the honorable member’s question is as follows: -

This act came into operation on 1st June, 1961.

Immigration

Mr Cairns:

s asked the Minister for Immigration, upon notice -

  1. How many persons born in Asia were granted permanent residence in Australia in each year since 1940?
  2. How many persons born in Asia entered Australia in each year since 1940 and remained for one year or more?
  3. What are the categories of persons born in Asia who may be admitted to, or allowed to remain in, Australia as permanent residents?
  4. How many persons in each of these categories have been admitted, oi allowed to remain, in each year since 1940?
Mr Downer:
Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– The answers to the honorable member’s questions are as follows: -

  1. Over the period 1940 to 1952 policy provided only that certain non-European children born abroad of fathers permanently domiciled in Australia would be admitted for permanent residence. The total number of such children admitted over the period did not exceed ten. Over the period 1952 to 1958 policy provided that certain non-Europeans who were engaged in local or overseas trade, who had been lawfully admitted, who were abiding by the conditions of their continued stay, and who had been here for at least fifteen years, could be admitted to remain without extension of their Certificates of Exemption. A ruling of the High Court established that this meant, in effect, that such persons had been granted permanent residence. The number of Asians who acquired permanent residence in this way is as follows:- 1952, 10; 1953, 51; 1954, 75; 1955, 18; 1956, 19; 1957, 4; total, 177. In late 1957 the Government agreed that any lawfully admitted non-European who had resided in Australia for at least fifteen years, who was of good character, who had abided by the conditions of his entry and continued stay, who had an acceptable knowledge of English and who had taken a part in normal Australian life could be granted permanent residence. The number of Asians who have acquired permanent residence in accordance with these provisions is as follows: - 1958, 142; 1959, 183; 1960, 187; total, 512. In 1960 it was decided that as policy had been changed to provide that the non-European spouses and minor unmarried children of British subjects (including Australian citizens) lawfully resident in Australia and not under immigration restriction, could be admitted for permanent residence, the temporary entry permits of those admitted under previous rules would be allowed to lapse and they would be regarded as having been granted permanent residence. Similar approval was given in respect of aged dependants, while it was also provided that the non-European fiancees of these sponsors would be entitled to permanent residence on marriage instead of being kept under immigration restriction as provided in earlier rules. As no formalities are associated with the grant of permanent residence in these cases, no specific figures have been maintained of those who, having entered under immigration restriction have acquired or who have become entitled to permanent residence upon the expiration of their temporary entry permits. To the end of 1960, the following had been admitted: - Spouses and aged dependants, 766; children, 165; fiancées. 165; total, 1,096.
  2. Figures in the form requested by the honorable member are not available for it has not been the practice to record arrivals by place of birth nor to maintain records of just how long a person who enters remains in Australia. When a person arrives he is asked to indicate whether he intends to remain here for one year or longer and certain statistics are maintained on this basis. However, as almost invariably the ultimate figures show that on this basis of record many more visitors depart than ever arrive only the “ net migration “ figures taken over time can give anything like an accurate picture. With this in mind, the following are the estimated “ net migration “ figures in respect of Asian entry over the period concerned: -

The “ net migration “ figures for the period 1950 to 1960 reflect very largely the non-European private student project. As at the 30th June, 1960, there were 7,918 non-European private students studying in Australia.

  1. Any Asian lawfully admitted into Australia for temporary residence who resides here for fifteen years, who is of good character, who has a” working knowledge of the English language, end who has taken part in normal Australian life, may apply for and be granted permanent residence. Any Asian fiancé or fiancee of a British subject (lawfully resident in Australia and not under immigration restriction), is admitted under restriction for an initial period of three months but is granted permanent residence when the marriage takes place. Any Asian spouse of a British subject (lawfully resident in Australia and not under immigration restriction) who was admitted at a time when such spouses were not granted permanent residence may now be granted permanent residence when any certificate of exemption or temporary entry permit now held expires. The only Asians eligible for entry for permanent residence are the spouses and minor unmarried children and aged dependent parents of British subjects who are lawfully resident in Australia and who themselves are not under immigration restriction.
  2. To the extent to which the information requested is available it is given in the answer to the first part of the honorable member’s question.

Cite as: Australia, House of Representatives, Debates, 16 August 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19610816_reps_23_hor32/>.

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